My study showed oxygen compressors need to be more than "oil-less"; they are also specially built with seals that won't ignite from compression heat gain in the presence of nearly pure oxygen.
Surprisingly, 95% pure oxygen isn't good enough for oxy/fuel torch cutting at present, with the single exception of gasoline fueled torches; it is just fine for heating and welding, though (go figure).
I think using the separated oxygen to enrich a small burner is a good bet (say, up to 1/2")for small casting furnaces; the numbers work against you in larger furnaces, as propylene is a better economic bet in refillable cylinders (oxygen separators don't last forever, so there is more expense to their use than electricity): when using disposable cylinders, the numbers add up quite differently. Propylene in DOT cylinders should cost no more than 20% more than propane, which is fully paid back in increased performance. Propylene in disposable cylinders is over twice the price of propane; not worthwhile.
Your comment about combining oxygen enrichment with natural gas fuel being its best use is right on target. Natural gas has its limitations, but heavy oxygen consumption isn't one of them.