I went to take some shots of my daughter painting. I was rather close, 4 feet or so. I had my D700 in A priority mode and set at the fastest aperture (2.8). When the lens focused, it changed my Fstop from 2.8 all the way to 5.6ish. It did this in manual and on my husbands D90 as well.
Is this normal because it is a macro lens and I was focusing pretty closely or is it broken?
Yes this is normal. The effective aperture on most macros gets smaller as they focus closer. You will probably find that to get f2.8 you will need to focus close to infinity.
Yup, it's normal. As the lens extends, it loses light. The maximum aperture isn't only reserved for infinity focus as you CAN use it closer on most lenses, but not for any sort of macro distance.