I have a nickel Model 27-2 that is pristine on the exterior and appears as new in box. Upon removing the side plates the photos show what appears to be some discoloration. It doesn't look like rust to me. Am I incorrect? It looks like dry oil. What is the best way to remove this? The action is smooth and the lockup is tight.

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Not an expert, but I'm thinking since it's dried lube of some kind, most any decent de-greaser and some wiping with soft cloth or soft-bristle brush would work. If degreaser contains ammonia, use caution on the nickel (copper base).
Since it's on a typically unexposed surface makes it even better.

Remoil spray goes a long way to clean most gun grunge.

It's just dirty inside that's all. Clean it with some remoil and light lube with some ballistol or remoil when done it will be good as new!

You can use a stiff toothbrush or a small brass brush. Hoppes solvent works well. Lightly lube and reassemble. If you have never removed the hand from the trigger, you may want to just brush and wipe dry.

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John 3:16
WAR EAGLE!

Whichever method you use from the suggestions above I will add use some compressed air to blow it out, then air dry for a while. hardcase60

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You want me to do what?

this is gunk, not rust
1 nylon bristle brush and kroil, let it soak
2 brake or carb cleaner spray
3 blow dry with air
4 spray down with heavy coat of Ballistol
5 blow excess Bal out with air
6 leave inside coated with Ballistol, does not do any harm
done

Yup desiccated oil & gunk. Ballistol will clean that up just fine. On the bright side you know no ones opened her up much.

As the others have mentioned, but recommend you totally disassemble it and clean each piece as is you only get the one side really clean.

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H Richard
SWCA1967 SWHF244

Yup - needs to be completely disassembled, thoroughly cleaned, lightly lubricated and reassembled. About a 30 minute job if you are familiar with how it's done. If not, have someone very familiar or a professional LGS help you out. Seems to me like a great time to learn if you have not done this before. There are great instructional shop books like Kuhnhausen's and some good videos on youtube.

Years ago I purchased a brand new M60 no dash that was lightly rusted inside before I even shot it! I make it a habit to disassemble, clean & lube a gun before I shoot it even if brand new. I have seen many new guns that need to be cleaned as they were not when they were shipped.

Whatever method you use,
keep the Hoppes away from that nickel finish.

Was there a hammer block in place when you opened it up?

There is a gun that will sweeten up with a good thorough degreasing and proper lube job. Also looks like the hammer is rubbing the side plate a bit?
Does not look like rust to me either, however I just opened up a friends King Cobra that had a rusted cylinder lock and some other spottiness in other areas, be careful how you store it and watch out on rubber grips.
Honestly they are not difficult to take down and re-assemble, you learn one and you have learned many.

Hope it cleans up well for you!
Karl