I believe this might be a TV movie, probably from the very early '90s ('90-'92). I don't quite remember what it was about, but I do remember it took place in the sewers and there some kind of sewage sludge that, when touched, would turn said person or animal into a monster. There may have been a large group of people, but what I do remember is that there was a PHYLLIS DILLER lookalike that got turned into a 10-foot pillar of terror. I think it was a stop-motion effect. The image of that monster has been burned into my mind since the day I saw it, but to this day (over 10 years) I have not for the life of me been able to figure out what I saw.
Please, please, please!! If you have any ideas as to what this might be I would be eternally grateful.
UNK SEZ: Zoe, when I hear "sewer" I think C.H.U.D. but I don't recall the old lady monster that you mentioned in that one. 1991's THE BONEYARD does indeed feature PHYLLIS DILLER and she does grow into a giant monster at one point in that film. Check out the trailer HERE and for an extensive review just pop on over to the great ZOMBOS CLOSET OF HORROR. Let us know if thats the one you've been looking for!