Thanks gents for the replies...I ordered a new chain a while back, but the mileage on the chain is not that high....the gray color on the inner links is chain lube enhanced by the camera flash.
I do think I my have been a little harder on this chain i.e. I switched back from GP shift to standard shift, because I am dirt biking again...this caused one or two rear end sliding down shifts when I was expecting an upshift

. Thats not too good for the chain...
The chain is on loose, I always go towards the loose side....(insert wise-ass comment). The sprockets are wearing even and not on the sides at all so I think the chain is aligned..