Answer: Unfortunately it sounds like your plant (Corylus avellana "Contorta") is not doing well. You would need to prune off any truly dead wood as it will not come back. If the new tall growth is coming from below the graft, or a root sucker, it should also be removed. Then determine the reason for the fungus (or possibly it might be scale). If it is due to internal rotting or crown gall, for example, then the plant might not be salvageable. I would suggest you work with your local county extension to obtain a specific diagnosis and based on knowing that, decide on how to proceed. I'm so sorry I can't be more encouraging.
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