Hmm, no.
I mean, the pendant is blue...
Although, the Masamune is not red in CT either.
Ah, sorry, I totally missed that. It is quite strange. I think Zergplex is on the right path: perhaps it is sort of like iron in that regard. Unprocessed dreamstone is red due to a chemical reaction in the environment (akin to raw iron ore usually being in the form of iron oxide, which is redish orange), but that reaction must be undone to make it a workable mineral (which, as a total side note, is what made iron processing a defining moment in real-world civilizations). There is some small hint at this in that the Dreamstone has to be "processed" before Melchior can use it to repair the Masamune, again as Zergplex mentioned, so the idea isn't without any ingame support.
ZealKnight, the issue of the Ruby/Red knife and the Masamune is a curious one. Was it thrust into the Mammon Machine in the original timeline? We don't see it, and the few scenes we do see don't seem to indicate it, but it is a strange matter nonetheless. It is a relevant question since if Lavos energy is responsible for the color change, the Masamune would have needed to have been thrust into the machine (or likewise exposed) in both timelines.
Notably, the Mammon Machine is itself built from Dreamstone (at least in part) and is first largely a warm color (tanish/brownish red) and then a cool color (greyish blue). This might support the idea that Lavos' energy effects the color of dreamstone (though there would seem to be a specific level of energy necessary for the change, or a certain concentration). Course, the machine is blue after the party has been thrown into it, which is itself a strange set of circumstances and might negate any significance.
