This story is most definitely a product of the late 1960s/70s because of its sexual nature. I am pretty sure it was in one of the American magazines of the period, although it might have been an anthology (Dangerous Visions, maybe?). The time is the near future. The hero is being chased by somebody and to avoid pursuit he ducks into a kind of sexual carnival. Although he does not partake, he witnesses the various entertainments. Two of them really impressed me: by entering one room it was possible to have sex with a ghost. The other was a game of chance called 'Stick-It' (honest!), where a male puts a particular organ into a hole in the wall and has either an incredible sexual experience or is castrated by a razor. To a teen who grew up reading Analog (don't bother looking for it there) it was a real eye-opener.
It was "I See a Man Sitting On a Chair, and the Chair is Biting His Leg" by Harlan Ellison & Robert Sheckley. It appears in The Magazine of Fantasy and Science Fiction of January 1968. I saw it in the Partners in Wonder anthology.
The lead character is an algae (waterborne mold?) harvester. The "goo", the mold he harvested, was processed to make all kinds of things. Safety precautions absolutely required that he make no contact whatsoever with the "goo", but he got slightly careless one day, then didn't think it was enough to warrant decontamination. Next day, he is absolutely hairless.
He's contracted a disease that is associated with the mold. Only four or five other humans are known to have contracted it, and each of them had wildly different reactions.
It turns out that the mold is sentient. And then things get weird..