Lavender is one of the easiest crops to grow organically, according to the National Sustainable Agriculture Information Service, because it has few insect pests and few diseases. The one liability lavender does have is an aversion to wet, clay soils. Lavender can't tolerate wet feet and will rot or develop fungus problems when soils don't drain. While some lavender varieties naturally have silver or grayish-green foliage, the most likely cause of gray leaves at the bottom of the plant is a drainage problem.
Dig up the plant carefully with the shovel, leaving the root system intact. Set the plant aside in a shady location.
Dig up the soil where the plant was growing to a depth of 18 inches and place it on a tarp. Mix it with compost and sand so you have a soil with equal parts sand, compost and clay.
Place the amended soil back in the hole. Inspect the plant and prune away any diseased leaves or roots. Replant the lavender in the improved soil. If the plant hasn't been severely damaged, it will rebound and begin to produce new growth, although a plant with rotten roots may not survive.