It can be drought damage. Rhododendrons tend to shed individual branches when the roots get dry. If it is wilted in the morning, then it is dry for some reason. It could be a borer in the stem or root damage or too much competition.

If it is not wilted in the morning but wilts in the heat of the day, it is normal and is just new growth that is not hardened off yet. It could be aggravated by all the root competition.

Rhododendrons have shallow roots and can't compete with other shallow rooted plants like annuals. If fact you can't cultivate around rhododendrons since that damages the shallow roots.

Also, if it was planted too deep, this will happen. If the soil is too wet, it will happen also. Before planting a rhody, you should test the drainage. You dig a hole twice as deep as the root structure, fill it with water and see how long it takes to drain. If it take over an hour, the drainage is too poor. This is usually rectified with a raised bed with good well drained acidic soil.

This plant will eventually grow to 5 to 6 feet tall and need much more room and a good layer of mulch over the root zone. It is a vigorous grower, useful for background plantings. It is heat tolerant and eventually will grow to tree size.

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

The problem seems to be drainage. I amended the soil (it's clay) more thoroughly and planted the rhodo a bit higher. At the moment, it's VERY UNHAPPY. I hope it can recover. Just this morning was a monsoon, not exactly what is needed.

Thank you for the useful link and advice.