I had some fish I ran through the grinder and started to render the oil out… has anyone see separation like this??? The oil or what I believe is the oil is in the middle?

I have the same going on in a little jar with grayling guts. It's foamy gunk that's also oily and sticky, so it floats to the surface. I'm thinking it's some kind of fatty acid x decaying protein polymerization product which is lighter than water yet insoluble in it. You can just scoop it out carefully, like scum on soup. It will settle between the oil and watery layers eventually but it takes a (long) while.

Coincidentally if you heat leftovers from sun-rendered beaver tails in a pot, you'll get a similar picture, except it will form a sticky foam that will float on top of the oil layer.

It is a common occurrence when you pulverize something of a once living organic material. It is the separation of the solids to where they settle according to their mass weight. The total body mass of fish is a complex biological mixture of organs, fat, bone, scales and tissue.

The dense scales, bone and fins sink to the lower level. The oil appears to be in the next level above. The top is what I call the cream. It is the by product of the decomposition of the fish.

It is a foamy like material that is very light and fluffy. It is full of Carbon Dioxide and traces of methane which is very light in weight and escapes to the surface of the decomposing material, thus carrying some of the now "light weight" decomposition by products with it.

I think the Dark layer you have is water?

Oil will always be in an upper layer. Unless you have some type of emulsification going on?

I normally discard the water layer just because I haven't found a good use for it?

Separation is normal. What type of fish is it?