2011 Fox 40 FIT Issue

Sounds normal. That's the hydraulic bottom out control. I'm pretty sure it's adjustable internally if it really bothers you.

That is completely normal, it would seem strange to someone who has not worked with those dampers before. It should feel like it catches, and then has a higher amount of friction further into the stroke, which is released once the piston is removed from that stroke region.

The hydraulic bottom out uses a small piston with a glide ring that fits very tightly against the receiver that it enters, it needs to be a (very) tight fit to provide the level of sealing needed to build up pressure in the assembly. The sliding friction at that point in the travel is insignificant compared to the high spring force developed in the last ~inch when the fork is in real-world use.

As a side note, it's no longer adjustable on the newer inverted dampers (2011+) and is eliminated completely in 2014+ air sprung forks. In my experience it's not necessary (even on coil forks) if you are running the correct spring rate and level of compression damping for your body weight and skill level - however most people aren't, so it's a good fail-safe.

http://www.peterverdone.com/?p=314
If it really bothers you, you can remove it as per this article. I don't fully agree with him claiming it's an important adjustment (it's not really), although on the 36 it does tend to limit travel use (since it is active for a similar amount of actual stroke as the 40, even given 2" less travel). It's not really a problem on the 40 and might be handy if you are hitting big jumps/drops.

I don't really think there's a huge need to remove it, I'd just assemble the fork and ride it and then change it later if you are not happy. I only found it a problem in the 36 where it is active for too large a percentage of the travel, that's not the case in the 40.

Remember to use Fox Red (or Silkolene RSF 10) in the damper, and ideally Fox Gold in the lowers. I recommend 60-65ml per leg for lower lube over the factory 50ml - longer bushing life and a bigger buffer for contaminants.

No problem!
For the lowers the Gold is worth getting if you can find it (it is a custom formulation that sticks to surfaces much better than regular oils), otherwise I've found Motul "Expert" 15wt to offer reasonably good results. Hopefully you can get the Motul and Silkolene products.

My posts below provide further information on oils if you are interested.
Posts 16, 21 here:http://www.rotorburn.com/forums/showthread.php?242717-RC4-oil-weight&p=2529706&viewfull=1#post2529706
Damper oil
Posts 211, 214, 217, 221 here (excuse the arguments):
Damper and lubrication oil
I use the abbreviation VI a lot (w.r.t. damper oils), if you need an explanation:
Wikipedia - Viscosity Index