Question
Thanks again!  Just to let you know, we have turned our watering system off 4 days ago and have no intention of watering for the next week or so because of all of the rain that is expected!  

As for the green/blue stuff, it's simply pellets used instead of straw to deter the birds.  It's not a fertilizer but the landscaper today told me he did apply a starter fertilizer two weeks ago when he planted the lawn.  I took a patch of my grass to Cooperative Extension today and they told me they'll call me tomorrow or Wednesday with their analysis of what it is.  They said Pythium is very white any my cottonlike stuff is more grey white.  So I'll wait to see what it is but it has destroyed more than 50% of the lawn already.  I'll follow your advice and let you know what transpires.  Thanks again!
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Followup To  

Answer
Very interesting... gray-white, they say?

The only gray-white-tinged pathogen I can think of is Powdery Mildew. But that's usually a problem you see when the temperatures are cooler, with shade-grass. It's murder on Kentucky bluegrass.

Fusarium Blight is gray-green and some of the blighted sections of the lawn display a bulls-eye pattern.  There is a ruddy, rotted section at the base of the stem of each sick blade.  It's a disease you see in the dead heat of summer with strong sun and a lot of moisture.  Feedings of Nitrogen make it worse.  

Your landscaper's starter fertilizer would not by the way be high Nitrogen.  Starter fertilizers are big on Phosphorous. There's usually a dose of Nitrogen, but it's not a lot.  

I am very sorry to hear this problem has spread so aggressively and that your new grass has been hit with so much damage.  Too bad we can't turn off the rain we're having.  It's the last thing you need right now, more rain.  I was thinking about that on Sunday during the last thunderstorm; we had one on the North Shore.

Thank you for your message.  I look forward to good news soon I hope.