In my experience, lock-outs on forks don't generally tend to work because of a lack of oil, not too much, you will loose travel if there's too much oil.
OK, I've never serviced a Fox fork, but have done loads of Rebas and my Minute and recently researched doing Fox, here's some thoughts. By seals I guess you mean the actual seals the stanchions run through into the lowers - For this you'd not need to touch anythig to do with the lockout. Once you're done with doing that, then you should have the fork all back together and then remove the internals from the right leg containing all the dampening and change the fluid. When you go to refill the oil you need to put a bit in first, and then cycle the fork to make sure the damper is filled up and no air trapped then fill the rest of the way to the specified height.