I'm working on a Red Oak bow right now too. It has the same soft spots, I've just been lucky to not go to deep on them. Red oak may be cheap, but this is what you have to live with. Is that area hinging at all? If you are early enough in the tiller you may be OK. Go slow with the rest of the tillering, and avoid doing any rough tillering. If that area starts to become a stiff spot before you make weight your in the clear. I'm sure a few of the experts will be on shortly tell help you out.