
If the dog is a very pale fawn (cream) then yes it is possible it may be a blue-based colour... Blue dilution changes black to a 'blue' grey, red to cream, and black-striped brindle to a pale brindle with grey stripes.
I don't know if blue is rare in ABs or not.
If neither parent carried a gene for blue, then this dog can't be blue - or does she mean neither parent is a blue-based colour? For this dog to be a blue-based colour, BOTH parents must have carried the gene - it has to be present on BOTH sides. The fact that one grandparent was blue makes the likelihood higher, but the other parent must have carried it too... maybe hidden in the pedigree for generations.
However if the dog itself is not a blue-based colour, then there is no way of telling if it is a carrier, except by a colour DNA test (which is now available and accurate).
To learn more, then I can't recommend this site more highly - the site's author is a geneticist, and in fact is
the geneticist responsible for almost all the current ground-breaking data on dog colour genes:
http://homepage.usask.ca/~schmutz/dogcolors.htmlThe section on Blue dilution is here:
http://homepage.usask.ca/~schmutz/dilutions.html#blueIt might be worth remembering that, although Blue is a very highly sought-after colour, and attractive to many (as well as commanding silly prices in a lot of cases!) it also has some less than desirable features which may come along as part & parcel of the colour gene - notably Colour Dilution Alopecia, which causes a permanently thin coat and baldness.