Is the thread you are using old 100% cotton? It may have started to break down. I have started to use aurifil thread for hand piecing, and I use YLI quilting thread to quilt the top. I like YLI as it doesn't seem to knot up as much as the others.
In the past, I have used any thread for hand piecing, (except for the discount brands - they seem to knot up more) any decent brand works well. I also bees wax my thread length, I have had no discoloration at all.