Answer: Lavender absolutely must have well drained soil or it will suffer root damage and die due to excesse moisture. Unfortunately, it sounds as though this is what happened. I don't think there is much you can do except let the soil dry out again and hope some survive. You might be able to salvage some tip cuttings to start new plants. You might also want to check with your local cooperative extension and see if they have any suggestions. I am so sorry.
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