Considering albinism is the lack of pigment from the skin/eyes, no, there can't be blue albino's. I think that a lot of people tend to just associate red eyes with albinos and may think that that's all it takes; so perhaps they saw a very light blue rat with red eyes and considered it albino. Who knows. You were not wrong to correct them.
Long story short, the disabilities involved in spinal trauma are associated with cell death of neurons. The blue dye has the ability to attach itself to a receptor that mediates that cell death, thus keeping cells from dying. The unfortunate side effect is that it turns the skin blue lol