Compressed Coco Blocks Substrate Fungus?

Has anyone had any problems with Coco fiber substrates and fungus or mold? I had a Rhino Rat snake die fairly suddenly after I put in some freshly expanded coco fiber from a compressed block. Of course it was very moist because of the water used to expand the block. Should we allow the coco fiber substrate to dry out first, or do you use it immediately in your enclosures or bins? I assumed that it was OK to use in it's moistened state because it is advertised as a good thing that the coco fiber substrate retains moisture well. Recently, I saw my Scrub Python with his nose pressed against the gap between two glass door panels as if he was seeking fresh air. I had just put in newly moistened coco fiber substrate and it had a pretty strong musty odor to it. I removed my snake immediately to a holding bin and am now drying the substrate in the sunshine outside. Is this stuff safe in its newly moistened state, or should it be dried out before use? I know this stuff may sit around for a while in warehouses before it is used.