...your theory does seem farfetched.
What, the R'lyeh part?

Other parts of my message were based on sound physics. It's not so much as a theory as it is a hypothesis heavily relying on my (albeit questionable) knowledge of geophysics.

The mud is determined to be coming from an ancient pocket of liquid sediments (ie. mud). It is estimated to be down to 9000 feet deep.
In large proportions, the crust of earth is not exactly solid, it's more elastic. So, if this liquid sediment pocket is wide enough, it has a lot of ground area above it - as a thick plate of stone.
If you hold any plate just from its edges, the center of the plate is
bound to bend down due to gravitation. How much, depends of the elastic properties of the plate, and the size and width of it.
So - if the mud pocket is on wide enough area, the "earth plate" on top of it is certainly supported by the pressure inside the mud pocket. Thus, the weigh of the ground above the pocket certainly causes (some) pressure to the pocket. If the pocket's area is not too big, then the crust above it doesn't apply much pressure to the pocket because it can support itself well enough. As the area of the pocket increases, the stress on the ground plate above it increases, and slowly the plate is more and more suported by the increasing pressure in the pocket.
Natural gas and vulcanic phenomena are other things that can cause pressure inside such a pocket. However, it is more than likely to me that all three are involved here, to some extent. As vulcanic activity is quite high at the area, that definitely plays a big role in this... mainly geothermic heat generating pressure in the mud pocket. Natural gas surely adds to the mix, since carbohydron substances are encountered.
Aside from that, the sludge will probably be followed by the great and ancient divine Cthulhu, who will eat our brains while we worship him.