We still haven't received any word on the progress from the Maine State Library, but I discovered that they are beginning to post the Oxford Democrat newspapers to DigitalMaine: http://digitalmaine.com/oxford_democrat/
There is a built in search engine on the site, but I have had better luck using Google. Just put into the Google search box: site:digitalmaine.com "Oxford Democrat" <your search terms>. Some of the title pages appear to be incorrect at this point, but the scan and OCR quality is very good.
Many of the issues of the Oxford Democrat not available at DigitalMaine are now available at Chronicling America, and issues of the Casco Bay Breeze (South Harpswell) and The Union and Eastern Journal (Biddeford) have been uploaded there as well. A February update on the project from Peggy O'Kane of the Maine State Library promised that issues of the Portland Daily Press and Republican Journal (Belfast) will be coming online soon.
I have created a new search interface on this site to provide easy access to the Maine papers at Chronicling America.