Commentary for Megillah 4:7
כֹּהֵן שֶׁיֵּשׁ בְּיָדָיו מוּמִין, לֹא יִשָּׂא אֶת כַּפָּיו. רַבִּי יְהוּדָה אוֹמֵר, אַף מִי שֶׁהָיוּ יָדָיו צְבוּעוֹת אִסְטִיס וּפוּאָה, לֹא יִשָּׂא אֶת כַּפָּיו, מִפְּנֵי שֶׁהָעָם מִסְתַּכְּלִין בּוֹ:
A Cohein who has blemishes on his hands [likewise on his face or on his feet] may not recite the priestly blessing. [For Cohanim are not permitted to go up for the blessing in their shoes. And if he has blemishes on his feet, they will gaze at them, and thence, at his hands. And if one gazes at the Cohanim in their blessing, his eyes are dimmed (Chagigah 16a), the Shechinah abiding between their hands.] R. Yehudah says: Also, one whose hands are dyed with istis [a blue dye] or with puah [red roots, which produce a red dye] may not lift his hands, for he is gazed at. [The gemara concludes that if he were a "familiar" in his city, so that all knew about (and were indifferent to) his blemishes or to his dyed hands, or if most of the men of the city worked in dyes, it is permitted, for then he is not gazed at.]
Bartenura on Mishnah Megillah
English Explanation of Mishnah Megillah
Rabbi Judah says: also one whose hands are colored with woad or madder should not lift up his hands, because [this makes] the congregation look at him.
This mishnah teaches that priests who have something distracting on their hands, either a deformation or a discoloring should not lift up their hands because this makes the people look at them and not think about the blessing that they are receiving. The mishnah considers it crucial that the congregation focus not on the external attributes of the priest but the contents of the blessing that they are receiving.
We should note that today people refrain from looking at the priests’ hands when they are reciting the blessing and their hands are also covered with a tallit.
Since the mishnah is straightforward I have refrained from commenting below.