Yeah, it's the warm moist air from your house condensating on the pipe. A temporary trick/fix is loosely wrap saran wrap around the old insulation. This will do 2 things. Help give the old insulation wrap 100% support around the pipe and give an air seal (trap the air) in the old insulation, kind of how you put the cellophane stuff on your windows in the winter.
The down side is it will trap the existing moisture in there. They sell insulation sleeves at HomeDepot that is designed to slip over the pipe, but you wold have to take the pipe apart somewhere to slip it over.
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