It seems to be healthy looking. It is one month old
Unfortunately, your photo did not come through. I am unable to see the mushroom in question. Knowing, exactly, what it is can mean the difference between a living plant and a dead one.
planted muhly grass 3 yrs ago. for 2 yrs no provlem. this year it all has been turning brown. maybe because it has been raining like crazy. never seen so much rain in 20 yrs here. and the soil is clay...
I think that you are on the right track with your diagnosis. You can try fungicides, and feeding, but don't cut them until next spring.
Here are some articles that will help:
https://www.gardeningknowhow.com/garden-how-to/info/using-fungicides-in-garden.htm
https://www.gardeningknowhow.com/ornamental/foliage/muhly-grass/growing-muhly-grass.htm
The front of my house get Southward sun, so that would allow for about 4 hrs of sun. Is that enough for the plant to flourish?
A south-facing exposure is considered full sun so that is perfect. Muhly grass likes it hot and dry. Keep it watered till it is established, though.
https://www.gardeningknowhow.com/garden-how-to/design/lideas/plants-for-south-facing-gardens.htm
https://www.gardeningknowhow.com/ornamental/foliage/muhly-grass/growing-muhly-grass.htm
I've watered daily
It likely is getting too much water. This article should help:
https://www.gardeningknowhow.com/ornamental/foliage/muhly-grass/growing-muhly-grass.htm
I planted 7 Gulf/Pink Muhly grass plants in tall planter boxes in direct central texas sunlight. These have been planted for about a month now and are turning a light brown color and the green is going away. What is the cause of this? We try to water heavily but may miss a day or two throughout the week.
This sounds like it could be overwatering. They don't like to be wet, and do need a dry out between waterings. I would wait until it is dry down to about 1/3 or 1/2 of the container. This article will give you some general care on the plant:
https://www.gardeningknowhow.com/ornamental/foliage/muhly-grass/growing-muhly-grass.htm
the area gets good sun for at least 1/2 day
It could be a case of soil that is too fertile, or not enough sunlight. Both can be reasons that you would only get vegetative growth. These grasses are usually best neglected, and naturally grow in poor soils.
If possible, you may have to change location, or let them leech nutrients form the soil on their own for a few years.
https://www.gardeningknowhow.com/ornamental/foliage/muhly-grass/growing-muhly-grass.htm
I have 1 gal Muhly grass can I plant it now (late Feb/March 1st week)
It's best to wait till the chance of a freeze has passed.
https://www.gardeningknowhow.com/ornamental/foliage/muhly-grass/growing-muhly-grass.htm