First time using straw bales.

I followed the instructions for treating the bales for the first 11 days and I was so excited about setting my plants. I noticed the day after I set my plants these nasty white stemed black top mushrooms sprouted overnight in hoards. My plants started to turn black so I pulled them out and transplanted them in a compost mxture. What did I do wrong?

you did nothing wrong - they atre harmless.

http://davesgarden.com/community/forums/t/796529/

Yep, mushrooms are common and a good sign that your bales are decomposing nicely.

The sun will dry them right up.

Check the temperature down inside your bales. It may be too hot inside after only 11 days to plant your plants in. Mine heated up once last year after I planted and I lost 2-3 tomato plants.
The 'shrooms are perfect, just shows you it's decomposing.

Dioug

These mushrooms form a forest on top and the leaves on my plants started to turn black and started to wilt. I have a compost thermometer and these bales are pretty warm, could they be too hot for plants (100 -110 degrees) or too much of the nitrogen and burning the roots?

Continue to keep your bales moist and let them finish "cooking" for a few more days.

I will do that, thanks for the support!