I use Kraft mini marshmallows, Karo syrup, Domino powdered sugar and a little H2O to make my MMF. Tastes great, I like working with it.

Just one little problem. I'm getting little solid lumps of powdered sugar in it! So nothing I cover ends up being completely smooth. There are little bumps of this stuff in it. Anyone else ever have the same problem, and how do I get rid of it? A special sifter, or what?

Also, a forewarning to anyone else out there who is contemplating using Wilton's black coloring/dye to make gray. Just don't. You'll end up with purple if you've added it to a white base. It doesn't work. Made for some fun time this weekend!

You needed to sift that powdered sugar!

Yesterday I had the same problem with one batch of MMF. I overheated the marshmallows, and everything clumped up. It was unsalvageable. Fortunately, I had extra marshmallows and was able to make another batch. (I hit 2 minutes, instead of 20 seconds, on the microwave. It bubbled up and over the bowl.)
The successful batches were heated first for 20 seconds, then 10 seconds more as needed, until smooth.