Ok, so after lots more reading this arvo I am guessing that my problem is water retention and generally unhealthy soil. Went out in the garden with my trusty trowel and found:
dead patches - dry and rock hard
lovely green patches - soft and moist
I see that Fu argues that beetles really kill lawns, but when I did first spray they were **** everywhere and the lawn did seem to be showing classic signs - you could even pull out clumps. Oh well. It is done now - but have I just killed off all of my wonderful worms and other goodies that were abundant in winter, or are they just hiding because of the weather??
What confuses me is that in parts of the lawn the dead parts seem to be spreading. How does happen if it is not a pest issue? I mean, how on earth can bad soil spread? How can water repellance (for want of a better explanation) spread?
I stopped off at bunnings and got the appropriate supplies (seamungus etc) and will start fixing tomorrow. Is it ok to do this in the hot weather (Southeast WA)?