I am glad you escaped the flood. Please be sure your work is backed up every day if possible on media out of the computer.
re paint, no they never used any dazzle scheme on the Battleship squadrons.
the funnels were never painted entirely ever. They had bands of colour for ID for squardons, parallel bands usually white or light colour. Red was not used ever to paint the entire funnel or was blue that report is anomalous from everything i know. It was an id scheme used by a number of navies but none used entire funnels being panted that I know of.
You will see on the lead ship here, bands of light colour at the top of the aft funnels...
and in this photograph, the lead ship has bands of ID marking on the lead funnel:
and this one of the Battlecruiser Squadron, you can see ID bands on both funnels:
there is a book by Hipper about the Battlecruser squadron and it has photos with the painted bands on the funnels, that may help if you can find it.
I believe squadrons of teh Battle Fleet had demarkations based on ship type, for instance the Heligoland Class Dreadnoughts of the Highs Seas Fleet were grouped in one squadron, which made sense as the ships all had the same engines and speed and handling characteristics and that made command and control easier. I seem to recall seeing them with four strips on the funnel at one point, but that may be a vagary of memory as it has been many many years since I commanded the High Seas Fleet in wargaming with the Naval Wargame Society in London in teh 1970s. We had full fleet engagements with all ships involved and keeping so many ships underway and operating safely in close proximity with poor visibility at times was no joke.
Remember also that all command and control was mostly thru flags and lights, as radio was unreliable and unpredictable, so flag hoists which were often obscured by funnel smoke esp at high speed were the main method and squadrons had to pass the signal down the line of battle, at night which the High Seas Fleet had trained for and the British fleet had not, coloured lights were used on the fore mast and the smaller ships such as the torpedo boat destroyers were controlled from a light cruiser in command of the individual squadrons or a lead boat.
It is really remarkable there were not more collisions and accidents when underway but that was due to the high standard of training which both fleets achieved thru constant practices and fleet manuvers and exercises in both peace and war. The comsumption of coal and supplies was enourmous if you recall that the demand created for coal by those huge engines underway esp at high speeds was just incredible. Coaling ship was an all hands operation that took days for the largest ships. That plus all of the spares and maintenance and supplies and upkeep, routine replacement of gun barrels, and ammuntion it is staggering the expendicture for a large battle fleet when the upkeep of an individual large dreadnought could reach 20 million pounds A YEAR. That plus the cost of new ship construction with new classes of both captial ships, and crusers both heavy and light and the ever evolving design of the countless torpedo boat designs and classes ...and then minelayers, mine sweepers, patrol trawlers, anti submarine shps, and later on early air craft service ships, and tenders ......net barrier tenders, and so forth, ...it was a huge undertaking by both fleets.
sorry to ramble but these thoughts came up as we discusses the funnel markings.
A number of marking schemes were tired over the years, often involvilng both paintings the ship funnels, usually with bands of colour...and also colouring the heavy gun amunition with coloured dye.. a practice that the Japanese Imperial Fleet used as late as WWII which mystified and actually alarmed the US navy which thought eronously that the IJN was using gas shells when actualy they were using dye to mark range and fall of salvo spreads.
In summary for accuracy purposes i am thinking the best guess is using a dull shade of white for the bands avoids making mistakes about colour but i dont think making entire funnels any other coour than the naval gray is safe without more proof....unless anyone has it.
hope that helps.
btw for the purpose of teh final format of the mod if you need nice images of ships of that era one of the finest british naval artists was Bernard Finnigan Gribble...some are here:
http://freepages.genealogy.rootsweb....20Vessels.html