If Someone Blocks You on Skype, Can You Still See Them?by Andrew Aarons
Someone's username on Skype showing up as grey all the time is an indication he's blocked you. You might see him in your contact list, but once he's blocked you on Skype, you cease to exist to him. Skype puts up a wall between you and someone who has blocked you, so you won't be to see him online -- even if he is.
How Blocking Works
When you choose to block someone on Skype -- or when she chooses to block you -- Skype treats you like strangers. You can't see the status of the other person and she can't see you. Likewise, you receive no notification of being blocked, nor does anyone. When someone blocks you, your name is removed from her contact list, so she'll never see if you're online or not. That person remains in your contact list indefinitely but will never appear online to you unless she unblocks you later.