Probably a fungal disease of some sort. New grass is particularly susceptable to them, and the constant watering makes it an ideal environment for fungus. Notice any white, cottony, spiderweb-like structures in the morning? If so it's probably pythium blight, a relatively common disease affecting young seedlings.

thanks for the advice. I am hearing pretty much the same thing from folks around here that know lawns as well.

any thoughts on what to treat it with?

Perhaps the most effective and fastest way to deal with fungal disease, including pythium, is a fungicide called Heritage G. It's granular, so no messy liquids, and lasts 3-4 weeks between applications. You can find it online, Lesco also carries it. It isn't cheap, about one hundred bucks for 30 lbs, but it's rate is 4 lbs./1000 square feet, so if you have a small yard it will last you 2-3 months. Home Depot carries two turf antifungals, but they are marginal at best. If you don't want to go the chemical route then just cut out the area of disease to prevent spread, unfortunately the fungus is in the soil, so it can affect your seedlings at any time.

Hi, I have the same problem except I live in Vegas, and I laid sod about 3 months ago. Everything was great until now, the brown patches are spreading and taking over the lawn. I also found mushrooms. This is driving me nuts too...

Do you think that if I spray fungicide the grass will grow back? I've read before about using baking soda to kill fungus...what is your opinion on that?

the only thing I could get my hands on immediately (everything was sold out. apparently, everyone has the same problem I do this week) was scott's fungus control. I put it down monday afternoon.

nothing dramatic has happened for good or ill yet. it doesn't seem to have gotten any worse.