Thats deffinatly blown. When the shock blows out, it could still have nitrogen in it, but that dosnt matter, because it is the oil that makes the biggest difference. If the seal on the shaft starts leaking, forget about it, it will feel just like you explained. There are two chambers in the shock, the gas chamber is in the remote resovoir and pushes a piston inside. Then the other half of the resovoir is oil, as well as the shock body. You should be able to find a replacement or get it rebuilt. The shock actually isnt too bad when it is working for what the machine is.
THE 80's RAGE! Currently owns:
81, 85 Yamaha Tri Moto 125
83 Yamaha Tri Moto 200 x2
82,83 Yamaha Tri Moto 175 project
85 Yamaha Tri Z 250
84 Kawasaki Tecate 250
84 Honda ATC 70
85 Honda ATC 350X
84 Honda ATC 250R
(2) 84 Honda ATC 200x
82, 83 Honda ATC 185s
81 ATC 200
Lots of other parts and bikes