That means, unless the character is REALLY strong, the character is as good as dead when fighting a shambling mound as it will get constrict twice (for it's own attacks), and then twice again if the character fails on his own attacks (two more right there). That could take out a Level 15 character no problem.
Yes, you are reading it wrong.
When a character is grappled with a shambling mound and they attempt a grapple check to do somekind of action (unarmed damage, break grapple, etc.) if the grapple check is lost they fail their attempt. They do not suffer damage by the opposing grappler. This does not occur until the opposing grappler's turn and the shambling mound makes it's attacks (grapple checks).
I would think a character can only make one grapple check per turn. Makes no sense to allow multiples, especially considering however overpowered and munchkin constrict can be.
The grapple rules are as they have been so far stated. If you don't like them you can ask about it in the house rule forum, a pretty good forum here on ENWorld. As far as my experience (quite abit with grapples) the system is more than satisfactory, and works well (though not as clear reading now as it will be in 3.5e).
Constrict is not too big of a deal, once in a grapple it's just a slightly more damaging natural attack. The large effect is the attack, grapple, and constrict ability (which likely will happen only once, unless the PC escapes the grasp and is foolish enough to stick around).
I'm guessing you had a 15th level PC go up against 4 shambling mounds (an ECL of 10) and you were thinking no problem, right?

Grappling is a serious condition that can multiply the difficulty of an encounter considerably. Even an orc who grapples the 10th level wizard (in a 10th lvl party) will suddenly alter the difficulty of the party's encounter.
Luckily a shambling mound moves rather slowly and the PC in question could have just stayed away and just made ranged attacks. Going into melee with 4 shambling mounds would have been a poor choice even for a 15th level character. I mean, might as well douse yourself in gasoline and rush in to fight a fire elemental. Remember CRs and such are calculated for a
party of adventurers with varying skills, not one high level PC. This same PC would begin having trouble in attacked by several numerous opponents and was surrounded.
You mentioned Vampires so I assume the PC is a vampire, if so if they began losing they could just turn to gaseous form and escape. But I think your problem with the scenario is thinking that the ECL 10 should be perfectly beatable by the 15th level lone PC. The encounter is perfectly beatable by a 10th level
party (as the rules were designed for, so no getting upset over the game design) and potentially beatable by a 15th level lone PC. Though the PC has to use tactics to his advantage since he is already tactically at a disadvantage (significantly outnumbered).