Well, Ive always wanted to try an assassin type character, but I want him to look badass
But sadly, Morrowind doesnt come with cool looking outfits for an assassin in my opinion

What I am looking for, is somewhat like a robe, not the gown though
It would be lose, and grey, and be torn at the sleeves.
And it would give Chameleon 70%
And a matching hood, but that could just be a hood.

PS: What I meant by no gown, is that it has leggings, not just a robe skirt.

I think that http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=7475 is the closest you'll get for a mod that is already made.
(You can always add the chameleon effect yourself with a quick edit in the CS.)

Try looking through the http://www.mwmythicmods.com/thiefassassin.htm mod list for more options. (there's a section on Armor/Clothing)