Greetings Kirk:
What you are describing is what we foresters refer to as a mulch volcano, where the mulch is piled deep and high against the stem of the tree.
As you now know, mulch volcanoes are bad news. I would remove all but 2-3 inches (depth) of mulch and don't allow any of the mulch to touch the base of the stem - this will keep the constant moisture you've artificially created off of the base/bark.
Good luck!