Anaerobic (sour) Mulch
Mulch normally smells like freshly cut wood, but sometimes develops a toxicity that causes it to smell like vinegar, ammonia, sulfur or silage. This happens when material with ample nitrogen content is not rotated often enough and it forms pockets of increased decomposition. When this occurs, the process may become anaerobic and produce these phytotoxic materials in small quantities. Once exposed to the air, the process quickly reverts to an aerobic process, but these toxic materials may be present for a period of time. If the mulch is placed around plants before the toxicity has had a chance to dissipate, then the plants could very likely be damaged or killed depending on their hardiness. Plants that are predominantly low to the ground or freshly planted are the most susceptible, and the phytotoxicity may prevent germination of some seeds.
If sour mulch is applied and there is plant kill, the best thing to do is to water the mulch heavily. Water dissipates the chemicals faster and refreshes the plants. Removing the offending mulch may have little effect, because by the time plant kill is noticed, most of the toxicity is already dissipated. While testing after plant kill will not likely turn up anything, a simple pH check may reveal high acidity, in the range of 3.8 to 5.6 instead of the normal range of 6.0 to 7.2. Finally, placing a bit of the offending mulch around another plant to check for plant kill will verify if the toxicity has departed. If the new plant is also killed, then sour mulch is probably not the problem.
Read more about this topic: Mulch