In alchemy this image is part of the process of blackening and a symbol of total unconsciousness, of decay.
A frequent symbol in nightmares.
The decay usually points to your own characteristics that have died and that you either need to let go of or revive. Fear of illness. Challenge to be more self-critical and more self-confident... Little Giant Encyclopedia
1- Putrefaction can represent disintegration. In real-life situations something may have gone wrong, and there is no longer any energy to sustain it. While on a conscious level we mav not recognise this fact, dreams will often bring it to our attention.
2- Decay for example in a relationship can be represented in dreams as putrefaction. When something is happening which will ultimately lead to a total collapse, we can often sense it as a bad smell - something is dying.
3- In spiritual terms there often has to be dissolution and disintegration before there is a new beginning. In dreams, if we have fear of this process it can manifest as putrefaction. Putrefaction can also mean death.... Ten Thousand Dream Dictionary