Here is a link to information about bluing or "black oxide" it's purpose and uses on guns. Hope this answers your question. you will have to copy and paste the link. http://en.wikipedia.org/wiki/Bluing_%28steel%29
Send it back to the factory or a trained professional
The reblue, even if factory, destroyed any collector value. As a shooter, it's worth about 100-300 USD, depending on how good the reblue is.
Retention of the firearm, and access to it.
The invention of the Firearm
For which make & model rifle??
The invention of the Firearm
Determines the use of the firearm.
Treat all weapons as if they are loaded.
Would have to see how much damage was done with the reblue. If this was a restoration, instead of a reblue, the gun could still bring over $1000. If it is a typically wheel-buffed hot-salt blue - which is totally inappropriate for that gun - value is maybe $400.
200-300 USD. Maybe a little more if Colt did the reblue and you can prove it.
A 38 Special cartridge can generally be safely fired in a firearm chambered for 357 Magnum due to their similar dimensions, but it is important to consult the firearm's manufacturer or a gunsmith to ensure compatibility and safety.
A felon can be "around" a person with a firearm as long as the felon doesn't own or possess the firearm, however, "possess" is subjective. If the felon can access the firearm, it might be considered possession if something were to happen.