RE: Getting incorrect color for an extended element(type: 106).

>> Presumably that inherits from some class in the MicroStationAPI?
Yes as below:
class CElementGraphicsProcessor : public IElementGraphicsProcessor

>> What is the value of uiLevel?
uiLevel is 4

>> What is the value of displayColor?
0

Is pDgnModelRef valid?
Yes.

Regards,
Sundar