Why does the center of my pile of grass resemble cotton candy?

So I mowed the lawn and had to dump the grass in the corner of the yard and then I couldn't do anything about that pile of grass for a week due to a combination of laziness and business. It rained once. When I finally got around to cleaning it up, I noticed that the inside looked like a combination of grass and gray cotton candy. It was infested with just about every kind of bug. It didn't taste like cotton candy.

If it looks like white cottony threads it may be either actinomycetes (a kind of bacteria) or fungus but in either case this is OK. In active composting, the bacteria-fungus are the primary consumers, the organisms that eat the organic residues. This process generates heat. This is part of the overall breakdown cycle. Proteins, lignin, cellulose, carbohydrates, and other compounds are broken down by bacteria into amino acids, ammonia, simple sugars' organic acids, and carbon dioxide.
The bacteria eat their way into the centre of the pile, and are followed immediately by the whitish mycelia of the fungi which absorb the gases given off.
The insects and other invertebrates are also an active part of the process. Together with bacteria, fungi, and other microbes, these organisms make up a complex food web or energy pyramid with primary, secondary, and tertiary level consumers.
You were lucky it rained only once. This was enough moisture to keep the pile going but if the threads continued to grow it did not go anaerobic. Once the oxygen is excluded by water the smell turns very unpleasant, like bad eggs, from hydrogen sulfide gas.
If you really want to compost it add about 1.25 lbs shredded paper or 7 pounds shredded leaves per 10 pounds of grass. Mix and turn

Look at this page from ATTRA on fungi and actinomycetes
http://attra.ncat.org/attra-pub/soilmgmt...
Compost info from Cornell
http://www.css.cornell.edu/compost/chemi...

The moisture from the rain and the heat produced by the piled up grass caused mold to grow.

Piles of freshly cut grass not only begin to smell really badly like vomit but the rain only made it worse by causing it to start to decompose and mold.
Now if you had layered an inch or so of the grass clippings, with some crumbled up soil and then dried leaves and then repeated the layers, it not only wouldn't smell, it would actually make some dark rich compost.

Get your fork out and give the pile a good turn over, then add some blood and bone, kitchen scraps and dead leaves and twigs off a tree. Turn this over once a week and you will end up with sweet smelling compost for your garden.

why dont you get a mulching blade and cover, and forget vabout dumping the grass. it will help build sod.

2 points for me

that gray cotton candy stuff is mold you'll have to let it dry and clean it up or it will get wet again, stink really bad because of the rotting grass and the mold could infest healthy grass nearby

because you could be smoking it