As far as how exactly it is happening, I'm not sure and am not educated enough to answer. I do now and have shown data that it is happening. I'll see if I can come up with any sources that have good explanations, though that still might be an unanswered question.

"So the CO2 increase is occurring in the atmosphere, but the warming is occurring in the lower levels of the ocean. What gives? How (and why) is this happening? Why would we not see an oxygen decrease if C02 were escaping from the ocean? Because it would be trapped down there?"

We see the oxygen decrease because when we burn fossil fuels, and all organic things, the carbon from them binds with oxygen to get CO2. If the CO2 were coming from something other than combustion, the oxygen content would not be falling in the correct ratio. If CO2 is simply being released from a reserve, no oxygen is used up in the process, so the oxygen levels don't decrease.

It is also probably important to keep in mind that our atmosphere is mostly nitrogen, so releases of CO2 from some kind of stockpile would not have an appreciable influence on the total amount of gas in the atmosphere.