Answer: Azaleas prefer a slightly acidic soil (yours may be too alkaline so you might want to have it tested). The pale leaves indicate a nutrient deficiency, probably because the soil is not acidic enough and the roots cannot take up the nutrients. Try feeding with a specialized azalea food (in amounts as listed on the label).
While overwatering can leach nutrients out of the soil and cause root rot, off-colored foliage almost always indicates an imbalance in soil pH. (If soil is too acidic (or in this case, too alkaline), nutrients can be bound up and not available to plant roots.)
To help clarify soil moisture recommendations, consistently moist means there is little fluctuation between moist and dry soil. It's a little like feast or famine - plant roots appreciate a steady moisture content in the soil rather than a flood and then a drought. The catalog description is saying much the same thing - soil remains moist 3" beneath the soil surface for quite a long time after watering. You can test this by watering your azaleas as usual and waiting 3-4 days, then digging a hole near the roots of your plants to check the soil moisture content. If the soil is moist 3" below the soil surface, you won't need to water again for a few days; if it is dry 3" beneath the surface, it's time to water; if it's soggy wet, the drainage is not very good and your plants could develop root rot.
Hope this answers all your questions!
Q&A Library Searching Tips