I did some experimenting with this on Siege this morning and had no problems with making items out of BoD reward cloth. They all came out the intended color. I experimented with making them out of cloth that had already been "combined" so it was folded down into neater looking piles of cloth, versus cloth that's laid out flat and still shows cut marks from unraveling something and cloth freshly obtained from the tailor. I experimented with both older cloth acquired before today and with a fresh pile obtained just this morning. I also tried all variations of the Mark Item option and the Quest Item option, as well as changed the leather coloring option. Everything came out the reward cloth color (mostly hats, but a few robes, half aprons, and gargish kilts).
The only time I got a "gray" item was when I had the "do not color" option checked. Everything was still fine after I changed that option back to the default, as well.
Can't think of anything else to monkey with on the tailoring gump or the cloth itself.
What items were you making and are you sure you didn't have the "do not color" option checked?
