It sounds like the typical problem of wood chips or bark mulch applied too deeply. When the mulch starts getting to 4 or 5 inches or more deep, sometimes the temps in the mulch heats up and actually dries out the mulch. When fungus spreads throughout the mulch, it can clump up as you described and prevent water from reaching the soil. It's a case where more is not always better. Adding a finer textured compost under the heavy wood mulch will help feed the microbes much faster, but moisture still needs to reach the soil. (The microbes are fine, they're just parched.) Try keeping only an inch or two of woody mulch on the soil and microbes and worms should start to work on the heavy clay. Wayne

The dyed stuff is cheaper because it is raw wood chips that have not been composted, just dyed. It takes time and energy (gasoline for the equipment to move and turn the material) to compost; it takes less time and energy to just dye raw chips from the lumbermill. That's why it's cheaper. I think the dyed stuff looks really unnatural, (the colors are awful) but any organic-based mulch is going to do what mulch does.

Nate, it sounds like the following is too late, since your work has already begun, but for what it's worth: We had 4 new roofs (entire house) and everything that that entailed (remove old roofs, put on new + gutters & downspouts) and new stucco siding on one side of the house's addition (hence, remove all old stucco, too). Contractor also created a new profile for the eave over that side of the house; also made and installed a copper overhang for the window on that side. Not all of this was done at the same time; still, a lot of construction materials and debris. Used the same contractor and his small crew for everything. The crew was able to do the roofing job by accessing all the roofs from the patio; the main issue was roof debris that ended up on the ground. They were exceedingly careful and neat but even now, I do find the occasional nail and bits of roofing material. For the stucco work, however, they needed to erect and safely access scaffolding. I asked the contractor to try to protect a daylily bed directly under the side of the house needing that work. For various reasons, I couldn't dig up the plants in it, even though it contained some daylilies I value a lot (eg LAST SNOWFLAKE, NEON FLAMINGO, COWBOY SCARF, MABOU, Jack Carpenter patterns, and more), so he set up the scaffolding on a large piece of plywood that was placed on cinder blocks on either end of the bed (and with two blocks supporting the mid part of the wood). The crew had to access the scaffolding of course, so one end of the bed got badly trampled & the soil very compacted. Even so, given what had to be done to the house, and the time they spent doing it, the daylilies sailed through everything in near perfect condition. There was a lot of bent and torn foliage, but it was late autumn anyway so that didn't matter. Plus, it was the crowns I'd been concerned about. We plan to use the same guys to paint the house's exterior next spring. Since I don't know exactly which month that will be, I expect to have to dig up the entire bed. Even so, I'll ask the contractor to once again place scaffolding on plywood on cinder blocks. The idea will be to protect the soil from compaction so that I can use that bed again as soon as the work is done.

I will also add my 2 cents to the discussion that your pH need no adjusting. The vast majority of plants prefer a soil that is on the acidic side of the scale and yours is just about right where it needs to be!! In addition to most plants preferring an acidic soil, most plants will tolerate quite a wide range of soil pH as well. Despite what your cooperative extension agent says (and as a professional horticulturist, I question the validity of that advice), raising it a few tenths of a point is not going to make any significant difference in what you can grow or how well it will grow. It is pretty much a waste of time. FWIW, soils in the PNW tend to have a very similar range of pH as yours and there is seldom ever a need to lime. Maybe the lawn now and again if on the lower range of the listing. In fact, in many cases, folks want to make their soil even more acidic to best accommodate ericaceous plants, like blueberries, heaths and heathers and rhododendrons. I would also like to reinforce Babs' statement that bark mulches, wood chips or pine straw do not contribute in any significant way to making a soil acidic or an acidic soil more acidic. You would need dumpster loads full to have any kind of measurable effect.