fungus invasion - ideas on stopping?

Carthage, TN

I planted a flower & herb garden on a sunny spot in my yard in 2007. It's contained by the driveway which has a boxwood hedge lining it & stops at the side of the garage, the other border is a sidewalk. The grass in this area was always patchy & almost nonexistent. I have had wonderful success in getting daylilies, sage, basil, rue, hyssop, lavender, etc to grow here. But I noticed this weird stuff that suddenly appeared in 2008 at the edge of the bed, closest to the driveway & boxwood hedge. Each year ist is spreading inward despite my best manual efforts to remove it. I've talked with the local extension service & they took samples. They actually came to the house when I told them it was growing up in my daylilies & surrounding them - I first spotted it at the base of the boxwoods. What I learned was this is some type of "shelf" fungus that probably originated from a tree/trees that had been removed but the roots remained - they are decomposing in the ground & this is a fungus (?) that is living in the roots, that stuff I see in my plants is the fungus reproducing -- at least this is what I got from the conversation. He said it wouldn't hurt my plants but I could remove it since it is unsightly & smells. He said also said it wasn't toxic to the herbs. It starts out a small, white bumps near the plants or in between the stems/fans & then grows into a cauliflower looking growth that turns into what you see above. It's very firm & difficult to remove. First it was just in the daylilies on the edge of the bed but now it's moving in & is appearing in the sage, the coreopsis, hyssop, etc. I try hard to pull it off of the plants but it's impossible to get all of it without completely destroying the plants, plus it also pops up just in the soil as it's moving in. It appears in early June, seems to grow actively through summer, then slows down in the fall & disappears until the next season. Any ideas on how to get rid of it? I'm afraid to take starts on any of the daylilies because I'm afraid I'll introduce this stuff to other beds - it's nowhere else in our yard. I have more photos but wasn't sure how to attach them. Any ideas, I'd sure love to now deal with this once & for all since manually trying to remove it is incredibly time consuming & not very effective. Thanks.

Thumbnail by JGinTN
Dublin, CA(Zone 9a)

You can attach more pictures by posting a reply--each reply that you post you can upload one more picture. That one's a bit out of focus so if you've got some more that you could attach that would probably be helpful.

Carthage, TN

Here are a couple, hopefully better pictures.....as it starts & gets bigger

Thumbnail by JGinTN
Carthage, TN

Another photo

Thumbnail by JGinTN
Carthage, TN

And another....

Thumbnail by JGinTN
Carthage, TN

Hopefully these are better, if not I'll take more pics. Thanks for any help/ideas you have.

Thumbnail by JGinTN

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