Actually the chief cause of rhododendron death is too much water when the weather is hot. In clay soil with poor drainage, it is very difficult to water without creating a puddling of moisture in the bottom. Raised beds are usually used over clay soil to prevent this.

Thrips are characterized by a silvery white discoloration on the leaf's upper surface and silvery on the bottom with small black frass specks. The damage is similar to that from lace bugs. Thrips are a problem in warm and dry climates like California and New Zealand. Most of the standard insecticides and insecticidal soaps can be used. Control for thrips whether an insecticide or insecticidal soap is a contact control and must be applied on the adults. This is most likely done in May in California when they are visible. Locally, biological controls may also be available. It is best to remove infected flowers.

Drought or Borers can cause entire portions of a plant die:

* Drought can cause entire branches or entire plants to die. We have had several years of drought here and we observe that if rhododendrons and azaleas are not watered during a drought some plants will die, but others will just have one section of the plant die. It seems to be the plants way to conserve what little moisture it has. Prolonged drought weakens plants and often results in the appearance of fungal cankers on the branches of older azaleas. Look for branches that wilt in hot, dry weather in late summer and be sure to water azaleas if drought drags on more than a few weeks. Prune out the affected branches to stop the spread of fungal canker diseases.

* If a Rhododendron Stem Borer, Oberea myops, or Rhododendron Borer, Synanthedon rhododendri, is in a branch, the entire portions of a plant beyond (away from the roots) will wilt and die. Borers only affect the portion of the plant away from the roots from the borer. If the borer is in the main trunk, then the entire plant will wilt and die. The plant can be save by cutting off the area with the borer and letting the plant regenerate from the roots. There are no conventional insecticides that will kill stem borer larvae once they are inside the branches. The best control option for homeowners with only a few plants is to prune out and destroy wilting branches in early spring or late summer.

On the other hand, entire plants wilt and die slowly when their roots become compromised. There are several causes of this:

1. Root strangulation. This is best prevented by proper root pruning when planting. If the plant is not too far gone, it might be rescued by digging and removing the soil. Then cutting any circling roots that may be strangling other roots. The roots need to be opened up. On larger plants, some of the top must be removed to compensate for the weak state of the roots. Any time the roots are exposed, they must be kept moistened. Roots that dry out will die.

2. Phytophthora crown rot or wilt. This root rot is the major killer of rhododendrons and azaleas. It develops when roots are growing in wet conditions. The rot is more prevalent in warm summer conditions. Plants infected with crown rot caused by the fungi Phytophthora have roots which become clogged with brown fungi internally. The roots get blocked and the plant wilts and dies. There is not much of any cure for crown rot. Some varieties of rhododendrons are vulnerable (Chionoides, Catawbiense Album, Nova Zembla) and some are resistant (Roseum Elegans, Scintillation, PJM). Sphagnum moss and bark dust combined with good drainage seem to prevent crown rot, but do not cure it.

3. Drought. It may have simply dried out. If you plant rhododendrons or azaleas in late spring, it is very important to give them some extra water while they are growing new roots. Never let the soil completely dry out; it's best to keep the soil evenly moist. Too much water or poorly drained soil might be another explanation of sudden rhododendron or azalea death. Rhododendrons and azaleas have very fine, fibrous roots that are easily damaged by waterlogging, even for short periods of time.

4. Voles. Voles, also known as meadow mice, may have chewed on the bark and roots near the crown of the plant. Sometimes they chew all the way around the trunk and kill the inner bark, resulting in death of the whole plant. Keep mulch away from the trunk to discourage voles.

5. Bark Split. The bark may also split when there are wide fluctuations in temperature in the winter. Rhododendrons and azaleas may begin to come out of dormancy if late winter weather is warm; if a cold snap follows, bark injury is likely, especially in sunny, exposed sites.

Here is a link that might be useful: Common problems of rhododendron and azaleas.

I'm wondering if drought isn't the problem with this plant.

An infestation of thrips or lace bug would have to be extreme to kill a 40 year old plant, and to my thinking, the drainage must be adequate for the rhododendron to have thrived for 40 years if no changes have been made in the landscaping to affect drainage.

Check leaf undersides for signs of insects - do test for live tissue under the bark by making a small scrape with a fingernail (or tool on more mature bark). Cut anything obviously dry and dead away with clean sharp pruners - if drought has caused the die back and the same lack of water hasn't damaged too many roots, your rhododendron may recover.