I just was looking in my amp with a flash light my amp is still under warranty and want to make sure that everything is going to be fine and i noticed that my output transformer discolored. I do not think this is normal but before i start calling my local music store for warranty i figured i would ask here. just ask for pictures if you need them and i will snap a few.

thanks for your help
Try calling your customer service and DON'T touch anything. If they tell you it's not right, then take it back to the shop.

Does it function properly btw?
yah it works fine and it was not like this when i first bought it. it almost looks rusted along the edge of the metal. on both transformer i was told by a few people that transformers will discolor but now i am seeing rust marks.
Some rust on your transformer can actually be a good thing. It supposedly can increase the efficiency of your transformer, but too much of it is a bad thing. If its just a little I wouldn't be too worried about it.

Sometime I intend to test this theory and see if rust actually makes transformers better.
There is some talk that the rust can make the transformer more efficient by better insulating each lamination from the other.

Surface rust is nothing to worry about at all, but if the transformer looks like a horrible rusty mess and your worried about it being a fire hazard then you can change it.