Did I kill my bees?

Hi there! I have two Layen's style beehives, which I built mostly by following the instructions at https://horizontalhive.com/. This was the second winter for one of the hives, and it was the first one for the other. At the end of October, I thought I was winterizing my hives by putting several layers of fabric on top of the frames including clean undershirts and towels. In one of the hives, I even put a small cushion. All of these materials were placed above the frames and underneath the lid. The lid has two side ventilations and the hive has a screened hole at the bottom to allow airflow. After collecting the honey and making sure to leave the bees a generous amount, I removed the empty frames and put an insulation board to tuck the bees in to one side of the hive (to the side where the entrance is). Finally, I reduced the size of the size of the entrance slit to prevent unnecessary heat loss.

When I arrived at the side today, I was faced with a catastrophe. All bees in both hives were dead. The fabrics in one of the hives were clearly wet. Perhaps rain found a way to get in it couldn't dry out. The top of the frames were all moldy. Even the left-over honey looked quite dark and unusable. The second hive appeared to be dry, but nonetheless the bees were all dead.

Now, a number of things could have gone wrong of course including some kind of infestation. But I was wondering if it was a mistake to use fabric as an insulation. I wonder if it got wet because of rain finding a way in or because of the condensation from within the hive. I would be very happy to hear your advice on this matter -- in particular whether I was doing something bad for the bees in an attempt to keep them warm.

As an extra information, I want to keep bees naturally by providing them good conditions and leaving generous amounts of honey for their consumption, which they make for themselves anyways. I don't want to feed sugar or spray any kind of chemicals. I am not in it for profit, but simply for the joy of keeping bees. My climate is a continental one, with relatively cold winters (can go below 0 degrees Celcius but daytime temperatures are usually around 0-10 degrees Celcius in winter).

As a related question, how can I clean the hive and the frames which got moldy? I hope I don't have to throw them away and start anew -- especially for the hive. My frames are also custom build as the hive dimensions are non-standard. Looking forward to your advice.

Oguz

With temperatures not getting much below 0C you really don't need to add any insulation. This winter my bees survived temps -25C with only insulation on top, none on the sides.
It's possible your bees needed more air circulation.
It's also possible varroa mites weakened them so much that they died.

As for cleaning the hives, it is not that important. Brush off the dead bees and scape off the wood. If you put new bees in the same hive they will clean off all the mold from the frames and wood.