My gut tells me this is not good, right?
Not sure why you think there's a problem. I see lots of buds for next season's vegetative growth, which is good. I don't think there are any flower buds, because those are generally much rounder and fatter than what I see in your photo, although certain varieties and species do have somewhat smaller buds even for flowers. By any chance did you cut this one back later in the season? That could deter flower bud formation. If you need to trim back rhodies, as well as azaleas, for any reason, this should be done as soon as the flowers have faded, thereby giving the plants the entire growing season to form the following springs flower buds. Many people make the mistake of trimming these during midsummer or later, and essentially they are throwing next springs flowers into the waste pile. Same goes for most early blooming shrubs, such as forsythia, lilacs and many others.
Your rhodie look fine to me. As Bill said, it has lots of buds for vegetative growth. I've noticed that these shrubs will make buds for next years leaves and flowers by late summer. Mine are loaded with flower buds this fall and I expect it will be an excellent display next Spring, as long as they don't suffer too much winter damage.
This looks like a very healthy shrub with lots of leaf buds rather than flower buds. There are several reasons why there are no flower buds--young plant, weather, etc. I wouldn't worry.
Maybe next year give it fertilizer in the spring when you see other rhododendrons blooming. They set the next year's buds not too long after blooming. And always mulch rhododendrons and water if it is a very dry season.
I'm wondering if Deanna is worried because the buds are starting to swell with our unseasonable warm weather. I wouldn't worry, however, since if these get damaged, the plant will make new leaf buds next spring, and in my experience, even if the outside of the buds look damaged, the leaves will still form normally.
Thank you! I feel much better now. I thought for sure I was getting flower buds from the warm weather. I did cut it back, but I cut it before the brown flowers had fallen off, so I know I didn't do any damage to next year's buds.