MyFishFinder.com Just like iceshanty but warmer
Last picture sure looks like chips on the blade. When you sharpen them you also need to touch up the flat side so there isn't any rough edges. If the bottom of the blades have rolled over you are putting too much pressure on the blades. Let the auger do the cutting and never push down like you would on a hand auger. Just a few stokes keeping the correct angle of the blades will sharpen them. the just a slight touch up on the bottoms. Good luck.
Look closer kiddo, both those blades are obviously on the right way -those type of blades have a minor(bottom) and major(top) bevel. The minor bevel will have a large sweep on the inside, the major bevel is a straight cut. Don't believe me, then look here at the major bevel http://www.landmsupply.com/department/sporting-goods/ice-fishing/augers/eskimo-10-quantum-replacement-blades. Rebells suggestion that one is upside down is wrong. You have at least two problems that are clear from those photos, your blades are roached(which is obvious even from a somewhat blurry photo) and at the very least the first turn of the flight has a very bad flat spot -probably from trying to straighten things out half way down a hole and or from standing on the poor thing while cutting. You need to either have the flight straightened out by someone who knows what they are doing or just throw it in the garbage and start over. Either way you might look into finding someone to show you the do's and don'ts of using a power auger.
Well, from looking at the pic, it's hard to tell, but I think at least one of your blades is on upside down. With the auger standing upright, the beveled part of both blades should be UP, ie; you can see it. The FLAT part of the blade should be on the BOTTOM..(toward's the ice, can't see it when upright), if that's how your blades are on, then I'd say your angle of attack is out of alignment. Remember, "sharp" blades mean razor sharp, you're actually "shaving" the ice at high speed. You should be able to cleanly slice a piece of paper with them.
Just curious ckfish...does that auger wobble when running it??
The overall bit where the blades are attached could be bent!!! NOT the "flight" side....the other side! Take a look.....the metal ring could potentially get bent, being open metal, with no support...... I could see that metal ring getting "reefed" on from being mis-used!