Get it out of the pot right away and check all the roots for black slimy mushy ones. If you find them, cut them back to where they're healthy, normal places. Repot into fast draining soil with no peat, but lots of grit in there so it drains fast (and don't leave the pot sitting in drain water). Stick a plain choptick in the soil halfway to the pot edge, with a permanent mark on it at the soil line, and leave it there. Check daily to see how wet it's staying near the bottom 1/3 (touch it on your face). If your mix is good then you shouldn't have to worry as much about watering too often. Once you've repotted, use a fungicide such as No Damp (just 1-2 drops at most in water) to drench the soil once. It's unfortunate, but you're still quite a bit early to be working on a mugo, but you may have no choice.

Should have mentioned don't use any of the old soil (rinse it off) if you repot.