n2fish, I think you're in the same boat I'm in. My driftwood is also too large to fit in a pan for boiling. I had soaked mine in a sink and poured boiling water over it, so the water it soaked in was HOT, but not boiling. But, like I said, I even tried the bleach (19:1 dilution for 5 minutes) in my sink.
I hate to spend money on fungicide if it won't work, but I REALLY don't want to have to re-do the moss tying either.
But, if it gets worse, I may just remove the moss, soak the wood in VERY STRONG bleach solution for a few hours, and then start over.
Does anyone think there's a chance the fungus would 'hide' in the moss and simply show up again after putting the moss back on?