I applied Heritage G yesterday (took a week to arrive) and I'm waiting to see what that does.

That is not how I read it in the original post. I read it as the OP watering to a soil depth of 4 inches, not applying a total of 4 inches of water. But I could be wrong.

I do know this. If that were pythium, more of the lawn would have been affected by now. Especially since a mower has been pushed across the area. It doesn't appear that the affected area has spread much more from the original photo. If that is indeed pythium, then consider yourself very fortunate that the disease didn't spread as rapidly as it usually does.

I water 30 minutes in the morning about 3 times a week because its summer and we're in a heat wave. We've also been experience very high humidity and when this started, it did not get cold at night. Perfect fungus conditions.....just sayin.

I've also got the same thing in another, higher, part of the yard not seen in the pic.

That wouldn't explain the streaking either.

Does this sound correct?

I wrote the following up before I saw your post...

Upon further investigation, the University of Nevada has this to say:

Drechslera poae, which affects cool-season turfgrasses (bluegrasses, ryegrasses, bentgrasses, fescues, etc.) and bermudagrasses, causes leaf spots, the early phase of the disease, which then progresses to the melting-out phase with complete death of the plant. The leaf spot phase occurs during the cool, wet weather of spring and late fall.

Bipolaris sorokiniana leaf spot looks similar to Drechslera poae disease, but it is more common during the summer or hot weather.

Cultural Control
Reseeding with resistant cultivars is an easy and effective way to manage the disease. Improve soil aeration and water drainage before reseeding the affected areas, even when using melting-out resistant seed.

Avoid excessive nitrogen fertilization in spring to reduce abundant, lush growth, which is susceptible to an attack by melting-out organisms. The total amount of fertilizer used annually should be divided between applications in the spring and fall. Having well-balanced fertilization will help control the disease.

Daily irrigation of 0.10 to 0.20 of an inch in summer and less in spring and fall reduces the severity of melting-out. Do not let the plants become stressed for moisture

What to do?

Clearly I have Bipolaris sorokiniana as this all started during very unusual hot and humid weather over a 4 week period. That, along with the recommended watering schedule left by the sod farm, resulted in this disease in my lawn. Since I haven't really heard much about how to remedy this I will follow UofN recommendations even though I'm in Calif.

Other information

I do have a sandy soil that appears to be kind of hard packed even though I did add amendments before laying the sod. It may be that I did not add enough. I think in my case I may have to rent an aerator and fill with compost. I am not sure when I should do that though so if anyone has any recommendations please let them fly. The daily light watering might do the trick. I can�t do anything else about drainage because I�ve got a patio slab between the turf and the only exit point from the yard but don�t think I need to. This soil has the capacity to absorb a lot of water before it pools on the surface (sandy). If I get a real heavy rain then I�ll probably be in trouble. Our annual rainfall is usually < 14 inches so I can hope. The slab was slanted toward that exit point for drainage when I had it poured but it hasn�t rained since then so I don't know how well it will drain off.

You don't need to soften your soil. Your screwdriver test answers that question. Three inches is good enough. Most people with hard soil cannot penetrate 1/2 inch.

You really do need to measure your sprinkler output. If you are putting out an inch, 3x per week, you are waaaaay over watering. It should be getting an inch per week, all at one time. Depending on your location, it might be much (much) less often than weekly.

If you are going to apply two rounds of different fungicides, I would also suggest coming back in a month or two with some compost. The app rate for compost is no more than 1 cubic yard per 1,000 square feet. Sweep that in with a push broom to get the grass blades up above the compost. Any grass that is buried in compost will die. The reason for this is your soil needs a huge population of beneficial fungi to be healthy. Spraying the fungicides sort of wipes out the most important part of the soil. Compost will start to restore it. Using organic fertilizer occasionally will fully restore it faster than anything else you can do.