Before dchall replies can you take him a picture from about 3 inches away. Get one of the grass that is still green at the perimeter of the brown area too. Also what is your definition of "water when needed"

The image is a little blurry when I zoom in but it does look like you have a fungal infection. Do you use chemical treatments on your lawn or organic? If organic you could start by applying corn meal to the area. I use cracked corn (it takes longer to break down but I can't find corn meal around central FL other than grocery stores) on my st. Augustine fungus. If you use chemical then I will have to differ to someone else to advice you. If you don't treat the area you are resodding, it too will eventually succumb to the fungus.

I don't have a preference of how to treat it, I just want it gone! Should I treat the bare ground before putting in sod? I've already ripped up the old sod and have st. Augustine (palmetto) being delivered Thursday.

I hired a spray service seveal months ago, but they have only fertilized and done pest control.

Yes you should absolutely treat before laying new sod. Read the post on this same page regarding the the new st. Augusine sod. DChall had replied to that regarding the same problem. http://forums2.gardenweb.com/discussions/1510032/new-st-augustine-sod-turning-brown?n=29

i would definitely go out tomorrow and get corn meal at least for the area you prepped for new sod. Do you have any grocery stores that cater to Hispanic cooking? (Make sure it is just cornmeal without any additives) You should be able to find it there. Then hit the rest of your yard with it (or cracked corn) too asap. I believe the rate is 20 lbs per 1000 square foot.

I will get cornmeal on it asap. Would it be helpful to treat with a funguside as well? I'm scared of how fast it's spreading.

If you put down a fungicide with cornmeal you will be negating the fungicide effects of the cornmeal. CM works by promoting the "good" fungus (Trichoderma) in your soil. Since fungicide is not discriminate it will wipe out all fungus. This is a decision only you can make. I chose the organic method because I have a young son and after reading lawn forums like this one, it made so much more sense to feed the soil rather than just the grass.

Before dchall replies can you take him a picture from about 3 inches
away. Get one of the grass that is still green at the perimeter of the
brown area too. Also what is your definition of "water when needed"

Debo you do seem to be reading my mind...or any of about 500 posts asking for the same thing. LOL.

I've used corn meal successfully in St Augustine since 2002. There was one year when it seemed to be only good enough to stop the spread. This year might be one of those years. It has to do with how much rain we got since October.

As Debo started to explain, corn meal works biologically. It attracts the Trichoderma fungus which is predatory on other fungi. It seems to feed on most of the lawn disease fungi, so it is considered to be beneficial. The application rate is 20 pounds per 1,000 square feet. It can take 3 weeks to see the new blades of grass coming out and not turning brown or getting spots on them. Here's what the spots look like. ...well for some reason GardenWeb is not letting me load a picture. Here's a link to the picture.

I get corn meal at a feed store in plain brown, 50-pound, bags but you can also get it in 25 pound bags at grocery stores catering to the Hispanic population. It's something like Masa Maiz. Read the ingredients to see if it has any baking powder in it. You don't want or need that. Just get plain corn meal or corn flour.

"Debo you do seem to be reading my mind...or any of about 500 posts asking for the same thing. LOL."

and I have read (and re-read) all 500 posts!! Lol

Thank you for everyone's suggestions! I spread cornmeal over the lawn and have installed new sod in the worse parts. Fingers crossed it all survives!

Keep us updated Sharon! I am battling some horrible fungus in my St. Augustine too! I'm also in central Fl and the rainfall has been outrageous! I am trying an experiment to treat the worst areas. I got some used coffee grounds from Starbucks and mixed it with cornmeal in a black garbage bag. It's brewing in my garage now. My thoughts are I can grow the trichoderma fungus and apply it for a faster effect.