@Rockhead,
I've been quiet since most of my experience is in drier areas than yours, soz - though even in humboldt county I didn't have trouble with mold and mulch (some trouble with mold otherwise, though, on one side of my house for example -- but I didn't mulch over there).
I've never used hardwood mulch or specified it for others, but I'll nod that that could be the problem, or part of it. Soil composition make sense re the drainage issues Rockhead is talking about, too.
I'll add that I've always liked something like 2.5 to 3 inches of mulch, never more than 3.5; that's also enough to keep sunlight from helping weeds grow.