It is most likely algea, a precursor of and one of the components of lichen. Submit pictures if you can.

It looks like your right about there. The main thing you looking for is to have that flare at the bottom of the tree exposed. A tree should never look like a straight stick going into the earth, you always want to be able to see that flare. I can't see for sure if the flare is visible on all side, but if your not quite there yet, your close. Example of a good visible root flare on a mature tree, it is much more difficult to see the flare on young trees, but it is there. This tree is also properly mulched - without deep mulch being piled against the tree. I'm including some additional info and photos of girdling roots. It is a bit more than you need to know for your tree at the moment, but it is a great thing to keep in mind for future care of your trees. This tree was buried too deep and I am in the process of extracting it, but it shows you about what the flare should look like: Notice the girdling root, you want to avoid these - they commonly happen when trees are buried too deeply (but at times in some species of trees, I was told by a isa certified arborist that it seems to happen anyway, even with proper planting). I plan to remove the root from this birch and I think it will be fine. This is what happens later on to many trees when the girdling roots are not corrected; it is too late for this tree, the tree is going to die from the girdling root (it is not raised up anymore as the tree has grown into it, but you can see where the outline is from the root that girdled the tree, it goes left to right in the center of the photo): (how do I know that someone is going to reply to this and say good riddance.....)

Looks like Pseudomonas syringae, a bacterial blight. Sango Kaku and other red barked JM's seem to be overly prone to this affliction (although other cultivars are affected as well). This pathogen affects scores of different plants, some only cosmetically and others somewhat more severely. With maples, the disease seems to be present in spring after a tough winter. Stem and branch tips that have been hit by cold are then infected with the pathogen during damp springs as the trees comes out of dormancy. Often the disease can be halted or at its least progress checked by pruning out the infected wood. The presence of the disease and its location is indicated by the blackened portions on the stems. You could conceivably save your tree by pruning out all the bare top branching down to where the trunk retains its red coloring. The two leafed out small branches on either side of this area are also showing symptoms of psuedomonas and probably should be removed as well.

Try the Citrus Forum if you get no traction here.