Answer: Your squash probably is suffering from virus problems. Squash are very susceptible to several viruses which are introduced by insects such as aphids. Usually, the squash fruit shows a green and yellow mottled appearance when the plants are infected. I have found squash virus to be especially bad in my garden late in the season.
The best way to avoid virus problems is to start with quality, disease free seed. Second, plant in spring after frost danger is past and cover plants with a floating row cover made of one of the new spunbound polyester products. These materials allow light to pass through but prevent insects (which often bring the virus into the planting) from entering.
When squash begins to bloom, you can remove the cover to allow bees into pollinate. By that time the plant is far enough along to allow you to get a good crop before viruses can set in. Some gardeners leave the cover on longer, lifting it each morning to do the bee's pollinating work themselves!
There is no harm in eating the virus infected fruit. However, viruses usually result in reduced plant yields.
Thanks for the question!
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