Euonymus. This thread may be helpful. http://forums.gardenweb.com/forums/load/pests/msg0817290317765.html

if you have wood in your garden ... as in.. your mulch ... in the process of its decomposition ... all kinds of molds and fungus attack it ... and as far as i am concerned.. its a free show of ma nature... not a single one of them require any action on your part .... and unless you get rid of the wood.. there is nothing you can do about it anyway ... that said.. getting an ID.. and learning is highly approved.. knowledge is power ... ken ps: it should not even affect that green plant... since the green plant.. isnt dead wood ... it may be encircling it ... but it should NOT be attacking it [that said.. it could make a liar out of me.. lol]

There are people who say "spray fungicide" at any possible sign of fungus and there are people like me who refuse to use it. Nitrogen exacerbates fungal problems, so it's generally good to hold off on fertilizer if you suspect fungus. However you may have had nitrogen deficiency and needed some. Thank goodness you didn't use the urea! Milorganite for the most part is slow release. Try keep the grass blades dry, so if you need to water, do it early in the day so the grass can dry off before evening. If the problem looks like it's spreading and you are worried about major damage, here is some information on the kinds of fungicide least damaging to the mycorrhizae fungi: fungicides and mycorrhizae You had a soil test last year. Did it say you were low in potassium? If you were, Milorganite doesn't provide any. You could use potassium sulfate 0-0-50 to supplement the Milorganite. If the soil test did not indicate a deficiency, don't worry about it. Some general info on mycorrhizae: Mycorrhizae: so what the heck are they?

It does look like one of the Lysurus, but it’s a bit too far gone for me to specify.