Hi y'all--this is a cross-post from the soil forum...

This spring I've noticed that one of my flower beds along the house (east facing wall with deep eaves) was growing quite a few mushrooms out of the hardwood mulch. About 2 weeks ago I noticed some very odd amorphous red-brown and white fungus patches at the surface. I'd been watering with a soaker hose, so I removed it and started digging around. I was rather shocked to discover that beneath the upper ~1 inch of mulch, the mulch and soil was riddled with a whiteish grey-blue fungal material. The mulch was somewhat moist, yet the soil beneath--typically a medium brown sandy clay with good structure--was dry, whitish grey and brown, with almost no structure, and no earthworms (fairly common in my gardens) or other microfauna. This soil horizon extended to a depth of ~14 inches below ground surface, when it abruptly reverted to the heavy, dark brown clay that tends to be below the sandy clay surface soil.

I've never seen anything like this!

A little background on the bed if you'll bear with me:

I began planting there after moving to this house in August 2002. The previous owners had covered the soil with bark chips several years before I moved in and ignored it. Bermuda grass was primarily growing there before I began gardening in it. No shrubs or foundation plantings.

2 years ago I put down a layer of wet newspapers in an attempt at lasagna gardening. The compost I used to build the bed was primarily organic matter--not much in the way of inorganic constituents. The bed did recieve a heavy load of mulch last fall kind of by accident (~6 inches). Oh yeah, I don't use commercial fertilizers or pesticides/herbicides. The area does not recieve much in the way of precipitation due to it's protection by the deep eaves, so I water it on a semi-regular basis.

I had put in annuals, penstemon, iris, hydrangea, and columbine. In the 5 ft long section that is the worst in terms of lack of soil structure and degree of fungus growth, the plants were not doing well--at first I thought they were just dry since it's been quite dry this spring--I've moved them since the soil fungus revelation and they've generally recovered.

Upon the discovery of the poor soil health, I excavated as much of the impacted soil as possible from that five foot stretch (5 ft by 2ft by 14 inches = sore back!). I then backfilled with "clean" soil from other areas of the garden and sifted mature compost, and mixed thoroughly with what remained of the impacted soil that I was unable to remove. I put in some "throwaway" annuals to see what would happen.

Since then I've been searching for information and am at a loss. Any help?? The remainder of that bed is impacted, though not to the same degree. I'm unsure if my "remedy" will work, not sure what I'm dealing with, and hoping I don't need to remove the rest of the soil from that bed.

Sorry for the length of the post :) Thanks in advance!