Removing or improving large mulch area
My backyard is split between a grass lawn and a large raised mulch area. The area is raised above the lawn 2" to 5/6" depending on location (picture included). I moved into my home last Spring and it was looking great as shown. Throughout the summer, even though it was pretty dry, the lawn became more and more soggy, especially near border between the lawn and mulch. I thought maybe it was because of the shade so I limited watering. During a very wet fall and winter, the border turned into standing water, the mulch area began running over the border into the lawn, and currently the mulch area is like a sponge. You sink a good inch or 2 in certain spots. I've come to the conclusion that the mulch area was probably new in order to sell the house without giving any thought to future drainage.
Due to neighbors/laws and expenses I don't want to install a drainage system. I'm thinking about scraping and removing all mulch and some of the top soil under it, tilling the area, and throwing in some shade grass. If that works I would then work on the flower/garden landscaping in the fall or next spring. If grass doesn't work out it's easy enough to throw mulch back on or call the professionals.
Does anyone have experience doing something similar - removing a large raised mulch area? Would my idea of removal/tiling/seeding (dense shade grass) work in this area? Would this just be a total waste of time? My landscaping is limited to regular lawn maintenance and overseeding, and planting small flower beds but always found this to be a great site for do-it-yourself'ers. Thanks!