There have been a couple of posts lately about algae
described like this. Or describing algae that forms in lumps that
break up and dissolve on contact. Or describing algae the has a
really disgusting smell ...

Any of these posts could in fact be describing
cyanobacteria, also known as Blue-Green Algae. Cyanobacteria, as
the name says, is more accurately a bacteria than an algae.
Though it certainly appears like algae it is best to think of it
as bacteria that has developed the ability to produce its own
food through photosynthesis. Some, though by no means all are
actually toxic, currently the is a bit of a crisis on the
California coast, hundreds of seals and otters are sick after
eating fish and shellfish poisoned by this stuff.

Because of its unique abilities it is extremely difficult
to deal with, most traditional methods of algae control simply
don't work. Tinting the water and increasing shade is
ineffective, because it can move about and adjust its buoyancy
(one of the reasons it often floats up overnight) it will simply
migrate to the areas where there is light. It is very tolerant of
differing water conditions and can survive in conditions that
would kill fish or other plants, (it was one of the first
organisms to appear on earth, when the planet was still
inhospitable to most life). Like other animals it is able to
store the nutrients it needs when there is a surplus (Many of the
"nitrogen fixing bacteria" you want in your soil are
cyanobacteria) so massive, frequent water changes may help but
will not eliminate the problem.

The best way to proceed after removing excess decaying
material from the bottom of the pond is to combine physical
removal of the Cyanobacteria while encouraging the growth of
higher plants.

Cyanobacteria is uni-cellular (though it often grows in
colonies) so it is difficult to mechanically separate it from the
water, fortunately those cells are fairly large so a fine filter
like quilt batting will work (Though if you put the quilt batting
in your bio filter you need to change it regularly and be aware
that this may damage the "good bacteria" that are colonizing your
filter.)
You should also gently skim clumps off the surface with
something like an old nylon stocking (the finer the better).

Encourage your existing plants to grow and if necessary add more
plants, over time the higher plants will out compete the
cyanobacteria for the nutrients in the water... (which is pretty
much what has happened over the entire planet and is a good
solution to most algae problems).

You should also make water changes, but be aware that some water
sources contain phosphates (Some sources I've read suggest that
Cyanobacteria blooms in high phosphate conditions, primarily
because it can store nitrogen compounds)

I've also heard of people controlling it with small doses of
copper sulphate, though this is dangerous as even a small
overdose can kill your biofilter, invertebrates, plants and fish.

In a small pond or an aquarium it can be effectively controlled
with doses of Erythromycin (called Myacin as aquarium medication)
double the duration of the treatment from that listed on the
package. (This can get Very expensive Very quickly)...

Anyway if that was not already too much info you can check out
these links


http://www.ucmp.berkeley.edu/bacteria/cyanointro.html

http://www-cyanosite.bio.purdue.edu/

http://www.hc-sc.gc.ca/ehp/ehd/catal.../iyh/algea.htm