Galls. I found a huge one the other day also.

Here is a link that might be useful: Galls on azaleas

Exobasidium Leaf and Flower Gall, Exobasidium vaccinii: Exobasidium vaccinii is a very common fungal disease in the spring during wet, humid, cooler weather on azaleas and occasionally on rhododendrons. Some of the native rhododendron species (azaleas) are more susceptible than hybrid rhododendrons. In April and May leaves and buds of infected plants develop distorted growth. The fungus invades expanding leaf and flower buds causing these tissues to swell and become fleshy, bladder-like galls. Initially, the galls are pale green to pinkish. Eventually, they become covered with a whitish mold-like growth. Fungal spores are produced within the white growth and are spread by water-splashing or wind to other expanding leaf or flower buds, or they adhere to newly formed buds, over-winter, and infect these buds the following spring. Older leaves and flowers are immune to infection. As the galls age, they turn brown and hard. The disease does not cause significant damage to affected plants. It just looks unsightly. If only a few plants are affected, pick and destroy galls.

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

thanks so much esh & rhodyman ... it has been very, very wet & humid this spring!

i have read ( & learned alot) both sites you posted ...

i will be sure to keep a close watch on the plant & cut off any & all icky stuff ... thanks again, phyl

gall eventually killed 6 Girard Scarlet Azaleas and 4 Girard White Azaleas in my yard. I looked it up and apparently those 2 azaleas in particular are very susceptible. If the infection is bad enough no amount of picking will help. I used corn gluten on the soil surface and try to prune or pick away any galls now. I planted hellebores in place of the azaleas and they have been healthy.

The best defense against galls is sanitation and healthy plants. I have never heard of anyone who cut off and destroyed galls when they were forming, and made sure their plants were healthy have any problems with azalea leaf gall. The trick is to throw all galls in the trash before they produce spores. If this is not done, the galls keep perpetuating themselves.