Are you practicing "safe renovating?" lol. I can't help with your problem but, if you don't at least wear a mask you could be inviting problems much worse than this. Personally, I would be using the respirator type of protection if there were any sign of mold. Not to mention inhaling insulation particles.

Is there any sign of chewing damage to your beams that could account for the pellets you describe? You should be able to see if the pellets are localized to the area or spread throughout the attic when you remove the insulation. If it goes beyond the damage site it may have been there before the insulation was installed. Just a thought. Can you crush these pellets? Could they be animal droppings?

Was this new construction when you purchased your home? Have you talked to the builder?

I agree that further investigation is in order before covering the problem up with flooring.

I think the pellets are vermiculite which contain asbestos, forget mold..I think I have bigger problems to worry about now...

Asbestos was used commonly in many building materials until its ban (actually just restriction) in 1978. In the late 1970's manufacturers had to start finding alternatives to asbestos, which was added to materials to increase their durability and fire resistance. Even after the restrictions, some manufacturers continued to add asbestos at lower levels, and others continued to sell off their inventories. Builders continued to use the products with asbestos as long as they were around. The asbestos made a superior product, so they would choose it over the new asbestos-free formula as long as they could. Many buildings built into the 1980's still have asbestos. So, basically asbestos is everywhere.

Asbestos is safe unless you disturb it. Friable asbestos is the bad kind, which means the material is easily crumbled to dust with hand pressure. Non-friable asbestos material is hard and cement-like; it usually feels very similar to Hardipanel. That kind is quite safe unless you go cutting or drilling it. Any type of asbestos fibers can be neutralized by wetting the material you are removing.

Common materials in older homes that contain asbestos are:
1. Vinly floor tiles (the 9" ones almost always have it and the 12" ones have it sometimes)
2. Transite pipe (cement piping used for exhaust flues, easily recognizable from the waffle pattern on the surface)
3. Old plaster, stucco, thinset mortar
4. Older Sheetrock joint compound and topping mud. The sheetrock panels are usually asbestos-free. I haven't seen any positive test results for sheetrock panels, but it could occur.
5. roofing asphalts
6. Thermal insulation. Older pipe wraps contain asbestos. Sprayed on insulation and loose fills also may. The insulations are usually friable. Most of the cases of Asbestos sickness are attributed to workers in shipyards breathing the asbestos dust they created while removing insulation.

It is not that expensive to test for asbestos. You can take your own samples and bring them into the lab. Anything over 1% should be treated as asbestos, and anything over 0.1% should be treated cautiously. The disposal requirements make it so you really have to use a licensed abatement contractor to remove anything over 1% asbestos.

I would not try to remove the asbestos (if it is). Just close it up in the cavity between the ceiling and floor. It can't hurt you if it's undisturbed.

I plan on taking the vermiculite sample to a testing center for analysis.

This is definately asbestos. Apparently a mine in Libby Montana manufactured 80% of the world's vermiculite insulation. The same mine was contaminated with Tremolite a very deadly asbestos. The mine stopped producing in 1990 but it is suspected there are 35 million homes with this substance. Not to mention the EPA calling Libby site of the countrys worst environmental disaster area. Considering the fact I live in the northwest it is almost certain that this is asbestos material and should be left alone. Now the dilemma is should I pay to remove it before I sell or disclose to the potential buyer? It's not fair that the builder/seller did not disclose this but rather pumped a ton of cellulose insulation over this stuff to hide it and claim new insulation without warning of the dangers.

I have decided to limit all trips to the attic, only for repair and checkups every few months and to eliminate it as a storage area due to the presence of asbestos like fibers such as vermiculite. As for the mold I may go back and spray the Concrobrium if I discover a problem.