I assume your budget limited the purchase of enough St Aug to cover the entire area. It will spread and will spread especially well when mowed at least 2 inches high. I've had great luck with it spreading at 4 inches. Now is the time is spreads. It will take the summer off from spreading and spread again in the fall. Total is about 10 feet per season.

Your grass started dieing near the curb because the curb holds heat from the daytime and dries the soil out all night. Those areas are much drier than the interior areas of the lawn. The rest probably died from watering improperly and may have been helped along by mowing way too short. I watered my lawn once a week according to the San Antonio Water System schedule, fertilized heavily with organic fertilizer, and skipped mowing every other week (or two). The lawn never looked better.

Watering
I have not watered my lawn in San Antonio yet this year. Then again I am on my way there after being away all week so I might be watering today. When I water I apply 3/8 inch all at once. BUT THAT IS MY LAWN. I thought my sprinkler put out a lot more water than it does. It takes 3 hours to apply that much all at once. For you I would start at 1 full inch. Use a cat food or tuna can to measure. Time how long it takes to fill the can. Apply all that at one time for the areas where your sod is intact. For the new sod, you'll have to water that daily or with the soaker for 2 more weeks. But then back off on frequency. Daily watering for just a few minutes will give you weeds and possible dead grass if you miss a day.

Mowing
Mulch mow at your mower's highest setting. Weld it in place so someone does not come along and do you a favor by cutting it down short. In the heat of a really hot summer (routine daily temps in the 100s) you should skip mowing every other week until the temps fall back into the mid 90s. Long St Aug does much better in the heat than short St Aug. At the end of the season, there is no such thing as a "final mow" like you hear about with other grasses.

Fertilizing
I would strongly encourage the use of organics. You can do things with organics that would kill a lawn on chemicals. For example you can fertilize every month or every week and not hurt anything. The grass just does better and better. If you are curious about that, go to the GardenWeb Organic Gardening forum and find the FAQs. The Organic Lawn Care FAQ is near the bottom of the list. Read that for more information. That is the plan that has converted hundreds if not thousands of chem fert users over the past 8 years. If you decide to do that, I have a suggestion or two to tune that up for 2012. If not, then fertilize with chemicals sometime in May. Memorial Day is easy to remember but that is getting a little warm. Then don't do anything but water and mow until Labor Day. Fertilize again then and again on Thanksgiving.

What part of the county are you in? The soil to the SE is more sandy and the soil everywhere else is limestone.

And for those of you reading from outside Bexar county, the X is silent. It is pronounced like the animal, bear.

I've always had bermuda near the curb, and it gradually gives way to St. Augustine, coming back towards the shade. I'd kind of like to keep it that way. I thought I might sow some in the bare areas, where it got crowded out by the St. Augustine, just to avoid patches of bare dirt.

I have mowed for years with a mulching mower with the blade at the highest setting. I'll have to study on this grass "mix." Those bare areas are going to look even more awful, soon as the wind blows the leaves away.

If you are familiar with, and happy with, the bermuda/St Augustine mix, then stick with it. I have that at my driveway at a house further south. I'm trying to see what I can do to get the St Aug back in there. I also have King Ranch bluestem to contend with. That is the tall grass you see growing in the highway medians all over Texas.

You said you watered it heavily. Can you describe what you did?

Rake your leaves away. St Aug is easily smothered. After 20 years of tending my lawn in different ways, I have come to the conclusion that the live oak blanket of leaves is there to prevent grass growth under the trees. Rake them out of the soil. You'll be shocked how much you get. I get bushels and bushels.

I can't overemphasize the benefit from proper watering. You are already mowing right. Then it comes down to fertilizing to get it dense and spreading.

I've never fertilized, because the lawn always looked decent without it. I have a neighbor who is always spreading or spraying something on his yard and, until last year, you could hardly tell the difference between his and mine. (Obviously, I'm not shooting for the cover of House and Gardens.)

Last summer was a stressful summer for most lawns in the area. I believe your problem was a disease. You have ruled out every other possibility. You're doing everything right and you checked for bugs. The only thing left is disease.

How is your new sod doing in the areas where it died last year? Does it look great or is it thinning out? If it is thinning out then you still have the disease in the soil.