Here's my newest issue:

A few weeks ago, I noticed that a portion of my foundation was being exposed due to erosion. The basic issue was that the rain runoff was running down the sides of the house and wearing off the dirt.

I went to speak to a local supplier about the issue and they suggested "contractors blend" - a cheap soil that they told me to mix with chunky limestone rock. I did this and later placed sod over the area.

It rained this morning.

Now... 12+ hours later, I'm finding that the soil in the "repaired" area is still spongy and wet. This "contractors blend" contains a great deal of clay. The worst part of this is that the area that's still wet is right up on my foundation.

What to do?

My initial thoughts are to dig it up, dig it out and lay sand. The sand would be followed up by some black dirt (not clay) and then some sod over that.

Right path?

The right path is to correct the grading so that water runs away from the house and pipe the gutter down spouts.

Harold hit the nail on the head. You need to grade the soil so its ptched away from the home and also install gutter to direct rain away too.

Fixing the flow is going to be a challenge.

The house sits on something of a hill. The yard slopes from the higher back yard to the lower front yard. Every house on my side of the street is like this... the back yards drain between the houses and onto the street in front of the houses.

The low spot that I filled in was an attempt to fix the grading by changing the slope somewhat. My problem is the material used to build up that slope. There are actually spots lower in the yard with different soil composition (not the "contractors blend" that I used, but the original soil) that stay firm after heavy rains. It's just this little segment that I built up that's so saturated.

Any thoughts on composition of the material I should use to build this back up? I'm going to be digging it up this weekend and replacing it... and then re-covering it with sod.

You might benefit from digging a trench around the back and two sides of the home. Lay down some gravel and then a fabric covered 3" perfroated drain pipe. The high point of the pipe would be centered along you back wall, sloping towards the corners and then sloping more toward the fron yard. No pump required and it should gravity drain.