That happened to me too. I think the problem is that regen cloaks have a level 7 (I think) minimum requirement. For whatever reason, some don't list that in the description, and it gets bungled when you use the custom appearance changer.
When it happened to me, a DM very kindly helped me out by giving me a new regen cloak and advising that I wouldn't be able to change its appearance until meeting the minimum level requirement. I'm sure one of our friendly DMs will help you out.