The answer to 'why is my retaining wall mud' is that the most common cause is poor drainage behind the wall. This can happen when the wall is not properly designed or constructed to allow water to flow away from the structure. Symptoms include standing water, crumbling mortar, and the wall starting to lean or bulge outward.
To fix a muddy retaining wall, you'll need to improve the drainage by installing perforated drain pipes, adding gravel backfill, and ensuring proper slope away from the wall. This is usually a job best handled by a professional landscaper or mason, as it requires excavation, concrete work, and proper compaction to ensure long-term stability. Attempting to DIY a major retaining wall repair can be dangerous and lead to further damage if not done correctly.