Answer: It sounds a bit like a borer infestation. The caterpillar tunnels through the leaves and downward toward the rhizome, where they begin to feed. Iris borer feeding can allow the entry of a bacterial soft rot. Rhizomes infected by soft rot are slimy, soft and foul-smelling.
There are other possible culprits, including iris diseases such as bacterial soft rot, iris scorch (probably caused by a phytoplasma), and fungal leaf spot.
I would dig up a rhizome and see if it is rotted. If it is, discard it. If it appears firm, I'd leave it for a while.
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