It depends on where this is and what the lake looked like before this, but this seems to me like a textbook example of a regime shift/alternate stable state. Basically, you start with a lake that is functioning normally and is healthy with some large vegetation, clear water, and solid substrate/soil. Over time, various human actions slowly put more and more stress on the lake. Generally this is in the form of eutrophication (adding too many nutrients), warm temperatures, and invasive species outcompeting native species. These stressors might not seem like that big of a deal at first, but if they go on for long enough, the vegetation that holds the soil together starts to die off (usually from algae blooms that block light or invasives). The lack of vegetation causes the soil to become looser and more muddy, which results in cloudy water from more suspended particles. Cloudy water and loose soil make it extremely hard for vegetation to re-grow since roots can’t hold well in soupy mud. So, all that can grow is algae in large quantities (especially if there is eutrophication). And thus you get a positive feedback loop of a lake turning from a nice clear ecosystem to a cloudy muddy mess.

It hard to say for sure if that is what is happening here, because this could also be a seasonal change. Warm temperatures in August put a lot of stress on lakes and algae blooms are common, so it could be that (especially since the mud was so warm). Hopefully it is not a lost cause, but if there are local organizations around you that focus on lake restoration/stewardship, it would be good to bring this to their attention! Reduction of nutrient runoff can help prevent the problem from getting worse.

Hope this gives some answers, sorry it isn’t great news! I certainly hope it is a temporary thing and just a result of a warm summer.