First of all, if you're making a theme for Transmogrified, you need to look at the Transmogrified layout layer and see what color variables are actually available (http://www.dreamwidth.org/customize/advanced/layersource?id=5927&fmt=html). See last section, "Properties Available". Transmogrified does not use color_page_link at all, so themes that are a child of Transmogrified will not recognize it. In addition, the shape of a color variable will be color_location_item, so, for example, color_page_link and not page_link_color. Use the exact variable that the layout layer uses, or it will not be recognized.

Also, as Afuna says, all the variables inherited from the core layer (anything that is set in a layout layer with "use some_variable_name") must have an asterisk, as shown in the tutorial here. E.g. $*color_page_link and not $color_page_link. The non-asterisk variables are, as the error says, "local" ones that are invented in a function within the immediate layer, not the core layer. For the purposes of converting a theme, every variable you use should have an asterisk.