I have an above ground pool, you have an inground pool? As long as the mulch is ultimatly lower than the concrete around your pool and the ground slopes away that should keep it from flowing into it.

And, if you pull out all of the concrete and the posts with it, then you can put new posts in the same hole and reconcrete them in there. That will save a big mess in itself. I have wondered if there were a way to "sleeve" the original posts, I also have a green chainlink and would eventually like to get a black one, and sleeving the posts would be alot easier, then I could just get a new top rail.