Inbreeding is proven to adversely affect egg viability. As for the problem you described, I doubt inbreeding would cause this.

My thoughts would be to put as few caterpillars per container as possible plus using 10% bleach to clean containers and leaves.

Last night, I did divide the cats into lots of containers. I even quarantine the bigger healthier looking ones into individual containers in hope to have good end result. You said to clean containers AND leaves ? I would have never thought to put leaves in there as well. Thank you KC for always being such a wonderful moth guru ! You are the best !

When you don't know the cause, you cover all the bases and hope something works. I should have also mentioned to make sure to rinse the leaves well just in case someone new is reading this. Last year, when I was worried about my sweetgum leaves, I had a bucket of 10% bleach in my moth room. I'd bring in the branches, soak them for 15 minutes, and then thoroughly rinse.