Is it possible to get a blended look from permanent eyeliner?

Yes it is possible. A combination of custom-blended pigment shades gives it a dimensional look. Please visit www.spcp.org for a list of skilled technician in your area. Society of permanent cosmetic professionals is the larges organization for the field and a good resource to get more info.  

When I have clients that want a smudge look, I use a wider configuration of needles that are spaced out so some skin will show through.  You can have a nice thin "crisp" line right at the lash line, called lash enhancement , then use the wider spaced needle just above that for the smudge look.  You can even use two colors, say, one black or mahogony for the line and maybe charcole for the smudge above that.  You can also just have the smudge.  Make sure you ask if the artist has done this before.  

Pat Connell and myself coined the term 'designer eyeliner' by utilizing a technique wherein we began decreasing the opacity of eyeliner colors as the liner progressed away from the lashline. Maximum opacity is important at the base of the lashes and directly above the lashes of an upper liner. A softer blended, less opaque color is then added to connect with the liner and extend slightly above. Some technicians layer lighter colors above the lash base, but this technique doesn't give a soft blended look, rather it gives a more trendy stacked look of slightly or dramatically different colors. Some like this look, but compared to a soft blended transitional look of a designer liner, its apples and oranges. Pat and I developed 'Halo' (tm) colors specifically for the soft edged shadowed liner for one pigment manufacturer. They provide an easy application of 'Halo' liners without the technician having to reduced the opacity of their pigments which can result in inconsistent applications. The Halo formulas take the guess work out of it. As the one technician here wrote, she uses a looser needle configuration to apply her smudge. This is also a recommended method as the pigment implantation with a looser needle configuration is more diffused; covering more area with the same volume of color application. A tight needle configuration is not recommended for application of a shadowed soft edge liner.  My website shows examples of Halo eyeliner.