when i look in fire bug, the .subnav_copy class is being applied to the editor body:
this is what is turning the color grey.
in the body class:
font-family: 'Myriad Pro', 'Lucinda Grande','Trebuchet MS', Arial, Verdana, sans-serif;
the font size is being set to 12px, increase this if you want the font bigger.
to add the other styles into the styles list, you need to select them in the available styles list.
only the styles that you select from the available styles list will be added to the styles list.
if you wish to start form scratch, delete the html editor folder.