Any shock that measures 13 inches fully extended will only have a little over 3 inches of total travel, and it's normal to have 1 inch or more of that total travel used up as "sag", just from the weight of the bike and rider. So his example of hitting a 4 inch pothole and only having 2 inches of travel would be true of all the other 13 inch shocks on the market as well. In other words, his explanation is pretty much useless.
If you see oil, then that is a very easy way to identify a broken shock. However, there are many other defects that don't result in fluid leakage. So once again, his explanation is of little value.
I would suggest that you ask to ride another similar bike (any '09-'10 Ultra will have the same rear shocks, doesn't have to be a CUSE4). If another bike doesn't bottom under the same conditions and the same air pressure, that is a good indicator that your shocks are bad and they should replace them. This is the only way I know of to test them, since no dealer I'm aware of has a shock dyno to test them on.
Jerry
Jerry you need to keep in mind that the angle of the shock on the swing arm allows for a longer travel of the rear axle than the length of stroke available in the shock itself.
Also the shock mounted a bit forward of the axle so you do get some multiplier of travel as an extended lever would do.
Yes, in shocks/coilovers, about 1/3 down is for ride height. In street rods you always set up the spring rate and mount angle to allow for 1/3 extension and 2/3 compression of the shock.
To get more travel on cars with the same length of shock you can increase the shock mount angle and go to a higher spring rate. The steeper the angle of the shock mount the more mechanical advantage the suspension has on the compression of the shock so spring rates have to go up.
I've looked a little at the 940 series of shocks and they have a soft spring on top that allows the shock to drop under very little load the first inch or so. Then I believe it may ride on slightly higher spring rated springs for normal riding. If the tire hits a hole the shock will extend quickly under the load of the smaller spring, but in up bump it would still be riding against the stiffer spring. I may be out in left field on the 940 workings, but it sounds good on paper from their ads etc.
I don't know for sure, but I bet if you looked at a softail shock pair they would not have as much physical stroke for the same amount of axle vertical travel as a touring shock stroke setup.
I'm just babbling now so I should just shut up and stop my fingers for running off at the joints...