Dry Rot Help!

We've recently started to refurbish a 3 bedroom terraced house we have bought. We started to sand the skirting boards last night in the back bedroom and noticed part of the skirting and door frame was wet where the wall backs onto the shower. On inspection of the shower tray I've noticed that there was no sealant at all between the tiles and the tray. So I've sealed this up with silicone until the bathroom is refurbished. I've had a look under the floorboards at the timbers underneath and they seem dry but the wall has strands of almost like plant roots running through it. Between the timbers resting on the ceiling downstairs there is a cotton wool like fungus. I think I may have dry and wet rot in these timbers.

Photos attached, any suggestions?
Dan

http://tinypic.com/view.php?pic=2drwj6v&s=8
http://tinypic.com/view.php?pic=1z2kk8z&s=8

Yes, you have dry rot - its very common and can soon be taken care of. Nothing to get excited about.

Am i right: you have indications of dry rot in the bed room & bathroom floors - and below the ground floor suspended floor?

Are any of the bathroom walls stud partitions?
Are any walls Dot & Dabbed plasterboard?
Is there a chimney breast near to the outbreak vicinity?

I'd suggest that you post more pics of the bathroom and shower, and annotate your pics so that we know where we are in the house? Pics of the outside elevation(s) near the bathroom & bedroom as well.

Can you also scan a simple sketch of the house plan showing (color coded) where you've so far seen the outbreak of fungus infection?

You could have dry rot, that certainly looks like hyphae (feeder strands) extending across the brickwork and this is one of the reasons that dry rot can be so destructive; the hyphae has the ability to spread across inert materials such as brick.
Treatment is straightforward...

1. Eliminate the source of moisture.
2. Introduce rapid drying.
3. Cut out and replace unsound timber a minimum of 1metre past the last sign of infection.
4. Introduce supplementary ventilation or reinstate compromised ventilation that facilitated the outbreak.

No chemical treatments are needed and sterilising the brickwork is a complete waste of time.

Hijacking the thread a bit here. Joe, I've got a similar dry rot problem, what would rapid drying consist of? Is there anything I can do to speed it up. Subfloor relative humidity is about 68% and the floor is well ventilated with airbricks.