Hello, stones_throw. Scales sometimes curl leaves or cause deformed blemishes. Bark infested with scales may crack and exude gum. Their damage is usually cosmetic but you sound like you have one heck of a heavy infestation.

Horticultural oils can be sprayed per label directions. You can also use Sevin and Bayer Advanced Garden Multi-Insect Killer. Multiple applications will be required to get rid of the infestation.

If you have large numbers of ants climbing up the plant, add a sticky material like Tanglefoot to act as a barrier band about 2 to 6 inches wide around in the main trunk. Check and replace it every week until the problem subsides. You can obviously spray chemical insecticides against the ants as well but sometimes these cause problems as they can kill natural predators that rhododendron pests have.

Since these insects are kind of tiny and difficult to notice when the attack starts, I am not surprised things are out of control. Aphids are more visible here and at times have managed to surprise me with a heavy infestation. What to do in the future? Beneficial insects usually keep these pests under control so keep this in mind when April 2008 comes to a close. Release lady bugs, lacewings (not lace bugs!) and or parasitic wasps, specially in & around areas that have had infestations in prior years...

Good luck and keep us posted,
Luis

The secretions of the scale cause sooty mold which in itself doesn't attack anything. You may have bark split under the sooty mold. Bark split can be fatal. The warm January and cold February in parts of the country caused a lot of bark split.

Sooty mold growth on stems and petioles is a symptom of Azalea Bark Scale, Eriococcus azalea, and Cottony Azalea Scale, Pulvinaria floccifera. These small sucking insects feed on the bark and exude a sticky substance that turns the stems black. A scale infestation is indicated by sooty mold on leaves, yellowing of leaves, and twig dieback. This scale is most obvious from May through June when white egg sacs may be found in twig forks. Heavy infestations over several seasons may kill plants. Overwintering immature scales (nymphs) are about 2 mm long, gray, and are usually found in twig forks. This scale primarily attacks azalea and rhododendron, but has also been found on andromeda, maple, arborvitae, willow, poplar, and hackberry. Azaleas can tolerate low populations of this scale without injury, and if there are no yellowing leaves, no treatment is necessary. Beneficial predators and parasites will usually provide adequate control of light scale infestations. Examine egg sacs for holes which indicates control by parasites, and look for predators such as ladybird beetles. To control heavy infestations, spray dormant plants with a late oil spray to kill developing nymphs on twigs. If necessary a 2% summer rate of horticultural oil may be applied in July after all of the eggs have hatched.

Bark split is most commonly caused by an early autumn frost while the sap is still high in the plant, or a late spring frost when the sap has already started to rise. For this reason it is dangerous to feed nitrogen to a rhododendron or azalea that could stimulate growth through to autumn. Don't use nitrogen after mid-June. When the sap freezes, it expands and ruptures the tissue under the bark and splits the bark. For this reason always keep mulch away from the trunk of plants. Bark split damage can be treated with grafting wax to prevent fungal and insect damage. If left untreated, it is fatal.

Here is a link that might be useful: How to grow rhododendrons and azaleas.