Some background info
The name Dry rot is misleading name as the timber must be wet for it to occur >28%wmc in pine, but after germination, the fungus can survive in lower moisture contents 20%, which are lower than the other major wood-rotting fungi. There is nothing dry about dry rot except, the visual damage to the timber after it has been consumed by the fungus.
An infection of the Dry rot fungus Serpula lacrymans is relatively simple to bring under control, by cutting off its water supply quickly, and this may not be as straightforward as there can be numerous reasons for the delay in drying out and is the primary justification for chemical treatments.
An investigation must be carried out with particular attention to the timber structural sections, which should be drill tested, where possible to find the extent of timber decay.
Ideally, we would expose the extent of an infection, which would also confirm the water source. After which we would issue a cost for repair and reinstatement, but clients want to keep the two processes together, therefore we give an estimate based on experience.
You may hear about the urban myth of the 1-meter rule in timber cutting back, and there is no science or any other reason except that the specifier/contractor is unable or unwilling to treat the wood correctly. Using the correct preservation formulations, you can treat infected timber and retain it, but this requires a level of training and guidance of site staff. Therefore, some companies approach is more destructive than the original infection due to lack of understanding.
The fungus requires an initial germination temperature of between 21 and 25oC preferred pH level in the acid to neutral range, limited air movement and suitable water supply (28-30%). Therefore, despite its destructive reputation, dry rot has a high degree of sensitivity to its environment.
Large brown cuboid damage with thick grey strands would normally indicate that the decay has been going on for a long period of time. Its fruiting body often occurs when the outbreak is distressed (It is the flower of the fungus).
Dry rot will not live-in masonry (without a wood source), the strands bringing nutrients back to the main body to help balance its digestive system and can pass through weak lime mortar or render, but not solid stone, brickwork and 3:1 sand with Portland cement.