Hard to tell from that pick, but I think you havn't gotten to the heart wood yet. The sap wood on walnut can be between 2-3" thick. On walnut that has been down for a while, particularly if the bark has fallen off the sap wood will had streaks of color like that.even on a fresh cut tree with an injury where there is no bark that part of the sap wood will look more like the heart wood than sap wood.
I wasn't overly fond of walnut either untill I started working with it. It works wonderfully. It cuts and machines well, it carves nicely and will hold details. it is strong and excepthionaly stable and takes any finish you can trow at it. It may not be your favorite to look at but it may quickly become your favorite to work with.