Answer: I can only imagine a yard full of mountain laurel, how lovely! Drought can be very stressful on these plants and when weakened by stress they may also suffer other problems such as disease or pest attack. Sadly,it sounds as though they died back somewhat severely.
You can certainly remove dead wood as it will not regrow. To check for dead vs. live wood: dead wood will be off-color and brittle with no green inside. Live wood will be a bit flexible and has green inside the bark. The new growth you see will be coming from live wood.
At this point, I would wait until next spring to prune them because the cuts heal faster during the growing season. Cut them back as needed to remove the dead branches, cutting above the new green growth. The new growth can be pinched or lightly pruned to help shape the plants and encourage branching. They should regrow fairly quickly (or in this case, a little less slowly) because they already have established root systems.
These plants are not heavy feeders, so you should not need to fertilize them much if at all. Do not fertilize them now, it is too late in the season. Next spring you could use a slow release fertilizer for acid loving plants such as Hollytone, read and follow the label directions. You might also apply a top dressing of good quality compost in the spring and make sure the ground is covered with an organic mulch, either by nature or by you. The mulch will help feed the soil slowly as it breaks down over time. It should be no deeper than two inches or so, these are shallow rooted plants that need air at their roots.
Without seeing the plants, it is difficult to tell if the damage was predominently due to drought or also to another problem(s). Since you have such an extensive planting, I would strongly suggest you also consult with a professionally trained and certified nurseryman, or a degreed horticulturist, or your county extension on site to make sure. I hope they recover for you.
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