I have moisture and a moldy smell in my attic. I had someone come out and open up the eaves and soffets more. It did seem to help but I still have some smell and some moisture. I have insulation on the floor of the attic and also on the sides, but perhaps not enough on the wall next to my bedroom.
Karen, this type of question has come up several times. The basic answer to to provide better ventilation and assure there are no water leaks. Humidity will collect in any attic that is not properly vented. It can condense on rafters, roof sheathing and insulation, then drip. As you are seeing, mildew and mold will result if moisture is trapped. If the problem does not improve after the venting situation is corrected, then you may have to consider replacing the insulation. Mold can cause health problems, an air mold spore test may be a good idea. If any toxic molds are present, remediation will be required. DO NOT ADD any more insulation over the existing insulation until the venting and mold tests are done.
As well as improving the ventilation, and assuming the water is condensation and not from leaks, you might also want to think about how the warm wet air is getting into the loft.
There are several ways that this can happen. It could be that there is a direct path that air is flowing though from the heated envelope into the loft. For example, is the loft hatch relatively air tight? Are there holes that are letting significant amounts of air from the heated envelope of the house into the loft? Is there any air conditioning/ventilation ducting in the loft that could be leaking? For example is there ducting from a shower extractor that could be leaking wet air into the loft space?
If not then it is also possible for wet air to infiltrate through plasterboard (and many other types of) celling. In some circumstances it might be worth adding a vapour barrier underneath the insulation above the celling. You can buy insulation with a built in vapour barrier. However, before going to that hassle I would really try to spend some time investigating if the wet air is getting in through some other route and prevent it.