Mushroom Armor In decline?
No, you don't generate more Mushroom Armor in decline.  From the rules on entering in Decline:


  To do so, the player flips his current Race banner upside down, so
  that the duotone In Decline side becomes visible to all, and discards
  the Special Power badge that was associated with it as that Special
  Power badge is no longer in effect, unless dictated otherwise (e.g.
  Muddy, Reborn, Royal, etc…).


As for the turn you go into Decline, the rules for Shield state "For each Mushroom Forest Region you occupy at the end of your Conquest phase".  Back to the rules for Decline: "The player can make no conquests during the turn his race goes into decline; his turn ends immediately after scoring!"  

Basically you don't even get a Conquest phase on the turn you go into Decline, much less any new Mushroom Armor...