The gg-grandfather I'm researching was half-Cherokee, as well as one-quarter black. His mother was a Cherokee from around Chattanooga. He was impressed into the 26th TN Inf - at least that's the story he told the Union army when he joined, and I have no reason to doubt it at this point. There was no need to admit to having been in the CSA at all, since he enlisted in a different state where no one really knew him.
His life before the war seems to have been pretty good - he was a blacksmith, he owned a prime piece of property in the town of Crossville and seems to have been fairly prosperous. Whether his neighbors saw him as 'colored' or not is something I'm still trying to determine. There were only two mulatto families in Cumberland Co. on the 1860 census - his and his brother's (who was also a blacksmith - it was the family trade).
He lived as a white man after the Civil War, though, which is part of the interest I have in this story. My Kentucky relatives are 'white', my Tennessee relatives in the same family are 'black'.