I came across your post while attempting to figure out how to save "seeds" (or really SPORES) from mushrooms so as to grow them successfully from season to season. I don't like the idea of having to buy my spores every year, because they cost money, and if I had money, I would BUY mushrooms, not try to grow them m'self!
That being said, I can help you out with your problem. I suspect that what has happened is that your spores have gotten an infection. Yup. They're similar to us humans (though obviously not related!) in that they don't like to be infected with bacteria. Indeed, that is why they produce antibiotics. Most of our antibiotics have either been derived directly from fungi, or have been reverse-engineered from them. Cool bit of medical history there. Truly there is a fungus among us.
At any rate, a big part of successfully growing mushrooms is making certain that they have a sterile substrate on which to grow. In the wild, they have an easier time of colonizing new-fallen wood or detritis because in the wild, they have mycellia firmly established and entrenched in every cubic inch of soil. I think I heard a statistic saying that there may be as many as 8 MILES of mycellial fibers packed into every square inch of an old-growth forest floor. Yup. 8 miles.
This is not true of manure. Indeed, manure more than likely has a high level of bacterial content and a very low or non-existent fungal content. What I have read, for oyster mushrooms at least, is that it is crucial to STERILIZE the substrate on which the shrooms will be growing. This means either:
a.) sticking it in a bowl of water and nuking it in the microwave on high for ~2 minutes (this WILL make your house stinky)
b.) sticking it in a pot of water with a lid over it and boiling it for 5-10 minutes at a hard boil
c.) sticking it in a pot over a campfire and boiling it
d.) pressure cooking it for 10 minutes or so
Any of these methods should result in sterilized substrate. That being said, I don't think I'd want to put horse or cow dung in my All-Clad! As such, there is another method I have been told will work.
You can take your substrate and soak it in enough water to completely cover it for 3 days straight. This results in fermentation which kills off the bacteria that would seek to harm your fungi. To do this, I think it would be best to head to Wal-Mart (that most hated of evil empires!) to buy one of those enormous plastic storage tubs that holds 30 or 40 gallons. I got a buy 1 get 1 free deal on 45 gallon tubs for 44.99 at Shopko the other day. They're insanely huge. I'm going to try growing vine crops in them they're so big. Yea. Nutty!
Anyway, if you can soak your substrate, you can probably get good shroom growth. Obviously it needs to be well-drained after its 3 day bath, because shrooms like it moist, not flooded.
The best substrates to use other than logs (again, for Oyster mushrooms at least) is STRAW (NOT hay--hay has too high a nutrient content, as per fieldforest.net and their wonderfully helpful husband-and-wife team of mushroom experts!) or sawdust FROM LOGS (i.e. not from processed lumber which has been treated with formaldehyde and goodness knows what else. You hardly want that stuff kickin' around in your food!).
I imagine soil and poo would help the process along, but ultimately, mushrooms need FIBROUS material to work on, which means the higher the celluloid content, the better your shrooms will grow. I'd imagine that once they have been established as a steadily growing colony, you wouldn't have to worry so much about sterilizing the substrate, though I am new to growing and therefore have not yet experimented with this hypothesis.
God bless you,