What does "be out in" mean?

There's a song "Winter" by The Rolling Stones, and there's a line

And I wish I been out in California

What does it mean - he wants to be in California or he's sad about being in California?

Here, out is used to express a location that’s at some fair distance away when used with the verb be. This is the same sense as when used with the verb go, as in this lyric from Neil Young:

Think I'll go out to Alberta,
weather's good there in the fall.
I got some friends that
I could go to working for

I am going to assume that your question stems from the fact that “I wish I been” is not grammatical in standard written English. The second clause’s verb, been, is not in a finite tense as a subordinate clause would formally require, but rather is just the past participle alone without an auxiliary verb accompanying it.

Although this is a particularly casual, even rustic or unlettered, way of speaking, it does occur in native speakers. It represents an extremely laid back or careless way of speaking, something raw and unpolished. You can tell this by the rest of the lyrics, which has things in it like draggin’ to mean dragging and the ’cross to mean across, not to mention ain’t, a perfectly normal word in casual (or mock casual) speech but one frowned upon in standard English. There’s also a bit of mismatch between subject and verb in these lyrics.

So you have to know how casual English works, and you’ll have to fill in the blanks when things are left out. Sometimes what’s missing may not be clear to non-native speakers first trying to learn English coming from another language, so you have to figure out what is possible and impossible to decide what was intended.

Normally, the subordinate clause following “I wish” would take one of two possibilities, depending on whether the counterfactual were in the future or in the past:

• I wish I were out in California. (in the future)
• I wish I had been out in California. (in the past)

That makes the second possibility the one that was meant. However, the sense of the lyrics can in isolation be argued to require the meaning of the first possibility. But there’s a later, connected clause in the simple past, though, which makes had been the right choice to place it back before then.

A third possibility, have been, is one we must rule out because it is subordinate to the verb wish, which does not take a verb in the present tense. However, has is indeed the omitted verb in the first line of the song.

I’ve marked the non-standard bits below in bold.

And it sure been a cold, cold winter
And the wind ain’t been blowin’ from the south
It’s sure been a cold, cold winter
And a lotta love is all burned out

It sure been a hard, hard winter
My feet been draggin’ ’cross the ground
And I hope it’s gonna be a long, hot summer
And a lotta love will be burnin’ bright

And I wish I been out in California
When the lights on all the Christmas trees went out
But I been burnin’ my bell, book, and candle
And the restoration plays have all gone ’round

It sure been a cold, cold winter
My feet been draggin’ ’cross the ground
And the fields has all been brown and fallow
And the springtime take a long way around

Yeah, and I wish I been out in Stone Canyon
When the lights on all the Christmas trees went out
But I been burnin’ my bell, book, and candle
And the restoration plays have all gone ’round

Sometimes I think about you, baby
Sometimes I cry about you

Sometimes I want to wrap my coat around you
Sometimes I want to keep you warm
Sometimes I want to wrap my coat around you
Sometimes I want to but I can’t afford you

It could have several meanings, depending on when it was written, and what the context is: I don't know the song, so I can't say for sure which. But it is not your second option.

It could mean:

in California, which is a long way from here

in California, and going out not staying at home

in California, and known to be gay.

I think it's probably the first one.