IDK anything about the white changing to blue so won't comment on that. But, I do know a little about flat irons and the usage in showing. Many of these show dogs if bathed, and allowed to air dry would have a slight wave or curl to their coats especially towards their rear end. Although the flat iron is used for straightening after taking down wraps too, if these dogs weren't wrapped chances are the flat iron would have to be used anyway because of the slight wave to many yorkie coats.
There is a link on another thread to a page that is showing some of the famous yorkies from the days of when flat irons either weren't invented yet, or if there was a flat iron it's obvious the iron wasn't used on these dogs.
http://www.yorkshire-terrier.com/famous-peds.htm