Yes I've read that passage many times, but in that case wouldn't the F-20s have been painted in desert camo like the F-5s?
http://combatace.com/files/file/2805-sauditigerzip/
Also on the web I found a modeller's attempt to make a Tiger Force F-20 and he says he actually corresponded with Barrett Tillman, who said that he envisaged the F-20s to be wearing the same colours as the Saudi F-5:
It was my intent to do this particular plane as a member of the fictional Tiger Force, but there was one slight problem—I didn’t know what the paint scheme was. The book’s interior painting was not much help as the artist drew up the F-20 in the prototype color of BMW metallic grey. I spent an evening flipping thru the novel to find marking information, but I couldn’t find any. Out of desperation, I emailed the author, Barrett Tillman, and got a quick reply. Mr Tillman explained to me that he saw the F-20s using the same paint scheme as Saudi Arabia’s F-5E Tigers.
http://modelingmadness.com/reviews/mod/us/leef20.htm
Having said all that, for the reasons in my post above, I still think that they should be grey!
@Riley64, have you read any of Richard Herman's novels, starting with 'The Warbirds'? IMHO they're tailor made for campaigns in the Thirdwire sims.