Discoloration of Egg Yolks
How do I keep an egg from turning dark inside when it is hard boiled?
--Raymond
The gray-green ring that forms around the yolk of a hard-boiled egg is the result of iron in the yolk combining with sulfur compounds to produce ferrous sulfide. There appears to be some question as to whether the sulfur comes from the white or whether the yolk itself has sufficient sulfur to cause the discoloration to happen. In any case, the reaction is encouraged by heat. The colored ring is harmless.
To avoid having this happen, use the freshest possible eggs (see the post Peeling Hard-Boiled Eggs if you plan to peel them), do not over-cook the eggs, and if they are not being served right away cool them down in ice water to prevent continued cooking once they are taken off heat.
As always, I recommend the Norpro Egg Rite Egg Timer to get eggs cooked to perfection.