This is classic fungal disease. See the circular shape? The appearance of the grass is dry which makes you want to water more. The fungus loves the additional water and sends up the mushrooms. When the mushrooms come up in a circle it's called a Fairy Circle. So the fungus is actively growing and causing the circular spot in the yard. The mushrooms are simply the fruit of the fungus. You're watering wrong to begin with. The second clue was that you're getting more and more weeds. Weed seeds require frequent watering to sprout. It sounds like you're doing just that. The third clue was the pictures showing the grass blades with fungal lesions on them. This time of year you can probably just leave it alone and it will not return next year. If you want to do something safe that will knock out the disease, apply ordinary whole ground corn meal at a rate of 20 pounds per 1,000 square feet over the entire lawn. Then stop watering for the rest of the year. When you start watering again, water deeply (1 full inch all at one time). Then don't water again until the grass looks wilty. In the spring that might be a full month. When you water again apply the full inch. Just get used to applying a full inch from now on. And let the grass go several weeks between waterings. When it rains hard, restart your calendar. You should be able to go several weeks at a time except during the hottest heat of summer. Then you might have to water as much as once per week. And if you think this is crazy, it has been proven to work in Phoenix...and (almost) everywhere else.

It might be worthwhile to have an expert look at those spots and make sure there is not something in the soil there that is killing the seed. many lawn services have someone that is able to diagnose the problem and will do so for free, except for any lab tests that might be required, to get you going they will of course offer a program to fix your problem, but you don't have to accept it. at http://allenlawnmowing.com we just worked with a client that called with a similar problem which we were able to help them resolve it after doing some soil studies. We are in Texas and the situation is different but the help should be available in your area,

Hi. We moved in a few months ago and our yard is a hideous mess. Dead patches and very lumpy. It looks like the previous owners put sod down but did not level out the soil - they just laid the sod onto the lumpy soil. Where do we start in fixing this? We are ok to put new sod down, if that's the best fix, but not sure what we need to do to prep the yard. Rototill it? Roll it? No clue where to start. Thanks.

The top picture looks more dense than I would expect in a Marathon fescue lawn. Is the lawn grass thick and dense when it's growing well? And are the tips of the new growth blunt instead of pointed. Does the grass send out runners over top of the ground? Here's a picture of St Augustine with the blunt tips. Or is it fine bladed with pointed tips? Runners or no runners?