Answer: Based on your description, I am not certain what is happening to your rhododendron. The deformed buds you described could be symptoms of infestation by an insect called the rhododendron gall midge. The rust colored spots/edges could be related to winter burn or winter damage, or they could be a disease of some kind. I would suggest you work with your local county extension to obtain specific diagnosis of each problem and based on knowing that, determine how to proceed. In general, I would not recommend replanting with another rhododendron or an azalea if there is a midge problem or an ongoing disease issue. Unrelated perennials should be fine.
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