bron said:John. I would not destroy your mulch. Sooby would know how long the spores can remain viable.......
We know the "summer spores" can survive over a month in a lab but we don't know exactly how long they can survive outdoors where the environment is less conducive. But it's correct that they can't infect dead leaves. All they could do on a mulch for as long as they survive is to be blown or splashed back up onto green leaves. A mulch can also potentially keep more of the leaf bases green by protecting them from cold. The "winter spores" can survive the whole winter but cannot infect daylilies so not a concern unless one grows patrinia.
But reading through John's post again I'm wondering if we can see some pictures of the problem. John says he suspected he had rust but wasn't sure until the spore stage arrived. But the spore stage is the first thing one would see because the fungus itself is hidden inside the leaf. Also dry climates are not conducive to rust and John is in Arizona (is all of Arizona dry?) so it would be useful to confirm that rust is indeed the problem.