This also means: "The cat is wasted (drunk)."
For a cat this meaning of "blau" is not really probable (though not impossible).
If someone tells me a Katze ist blau. I'd expect it to be drunk and not that it got a hair colouring. Same goes for a dog, I never saw a blue dog nor a blue cat (in the sense of being coloured blue).
Thinking about it again you're right. I was thinking about something like a children's book, where blue (coloured) animals are not that improbable :)