I noticed that my kitchen aide paddle, the paint has chipped off the edge, I also noticed that when I made 2 batches of icing, that my icing had a slight light gray color. So Im thinking this is the metal coming through.

Has anyone had this problem before and if so, how did you correct it? did you have to buy a new paddle or can it be refurbished? any idea??

First of all, your motor head is out of alignment, which is why the vinyl has worn off. Call KitchenAid's customer service department and they will walk you through the extremely easy task of aligning the motor head correctly. It takes all of about 5 minutes of less. Then just order a new paddle from any of a million online kitchen places. The gray in your icing is most likely aluminum rust. Throw away the old paddle, as it can harbor nasties under the vinyl.

Mine did the same thing and ditto what Cakepro said...
(I used that as my excuse to finally buy a Beater Blade)

Thank you so much!!! will call them today, as I have cakes to do soon again. My grand daug. has a bday coming up. lol....

have to go surfing for a good price on a paddle now.

I don't agree that it always a matter of bowl alignment. I make a lot of cookies with nuts and the action of the paddle and the nuts have worn of the bottom vinyl of the paddle. Now I keep that one just for cookies and have a spare for other more delicate uses.