GO CLEAN YOUR WASHER. i just did this and wow. What a difference- Tried it! I had to do some scrubbing because my washer is close to 10 years old and never been washed but it looks and smells awesome now!
How to remove stinky mildew smell from towels: Wash on hot w/ no detergent, but 2 cups white vinegar instead. Wash again on hot w/ detergent + cup baking soda. Dry COMPLETELY - use no fabric softener. Need to try this on the boy towels in our house.
Recharge towels by washing them once with hot water and vinegar, then a time with hot water and half cup baking soda. This strips the detergent and fabric softener residue and leaves them fresh and able to absorb more water again. Works like a charm!