Usually, you clean a horse's sheath very regularly – sometimes about once a month. Use warm water and ivory soap to cut through the grease and grime. If you can get the horse to drop, kind of flip back the head, and look for beans caught right next to the urethra – they're usually a light fleshy color.
Do you mean that you reached in and pulled out a handful (?!) or that, in all, you gathered a couple handfuls?
If it's the former, no, that's not normal. xD If it's the latter, then it was awfully dirty, but it's no big deal. ;)
I would recommend cleaning it again in a couple weeks, because it can build up quickly sometimes, especially, I've found, after you initially clean it when it hasn't been done.
Never underestimate the power of human stupidity. – Robert A. Heinlein