Good question. We don't really know the answer, given how Lucas has always talked down the condition of the existing materials as an excuse for why the OOT can't be released again.

For the first film, the same source was used for the Technidisc LD and all the THX transfers. It was apparently an interpositive of some kind found stored at an optical house in L.A.; if it was printed in 1977, who knows how much it's faded since the 90s?

However, on that note, the supposed "1985 IP" would have probably been printed on low-fade stock, which was introduced in 1982; contrary to some of the implications Lucasfilm has made, I am assuming that if said IP still exists, all the color would be intact.