I am a gunsmith and do quite a bit of hot bluing.  I am not a fan of cold blue, but there are some things you might have done in error.  You have to remember that bluing is a controlled rusting of the metal.  If you used any type of oil labeled rust prohibiting or rust removing, it will remove bluing.  When I hot blue I use a water displacing oil immediately after the bluing process to stop the process, remove the water, and prevent rust.  I would use an oil that is not labeled as rust removing or rust preventing on a soft cloth and apply coats until either the bluing stops coming off, or comes off completely.  It is possible that you are removing a surface layer and there is a good finish under it.  Prior to doing that, however, I would call Birchwood Casey and ask them what is going on.  If if happened to you it probably happened to somebody else, and they might have an answer for you.