Hi buttercupia,
Sounds like iris borer to me. I've included a link so you can see a photo and read more about them. I think there's information on the Iris forum FAQ's about what to do about this because it's a very common iris pest. Abbreviated version: dig your iris up in July, rinse, trim tops and inspect the rhizomes for iris borer damage. Divide and soak them in a diluted bleach solution (1 part bleach to 10 parts water) Rinse in clean water Replant. Don't compost the damaged iris or iris you suspect are infected. Put in a bag, twist tie and put in garbage. There's also things you can do to prevent the pests from overwintering. Also, you can release nematodes to kill the iris borer in early spring. Good luck. Hope this helps.

Here is a link that might be useful: iris borer photo and info

Buttercupia,
What you have is the larva of the iris bud fly, neorthochaeta dissimilis. The small fly lays eggs in the iris bud (seems to prefer Siberian iris). The little white worm eats the reproductive parts of the iris, which makes the bloom appear shredded and rotten, and when the blooms open, it crawls down into the spathes to pupate later in the summer. Apparently it over-winters as a pupa, to hatch out into a fly in the spring, and start the process all over again.

I garden organically, so I have almost entirely eliminated my infestation of hundreds of iris by hand harvesting each and every bud and either burning them in a metal can, or sealing them all in plastic, and hauling them out with the trash, for about 3 years, until the problem seemed under control. Now I get to enjoy the perfect blooms on my iris. I still put the stems and debris as I dead-head each year into the trash, instead of the compost.

I understand that the iris buds can be sprayed with a systemic pesticide when they are just forming, if you would like to go the chemical route.

I hope this is helpful to you. When I first discovered the worms in my iris, I was told by master gardeners and other experts that it must be rot, heat, borers etc. Nobody seemed to know. It took me nearly 5 years to identify this pest! Good luck!
Carie in Vermont

I am posting this image for anyone researching this topic by search engine. It took me a long time to id this pest as well It is hard to find images of it online mostly because it seems to be misspelled on many web sites. This photo was taken of the fly larva that I have had trouble with on Siberian irises for years. I can't verify whether the proper scientific name is Neorthacheta or Orthacheta dissimilis, although I have found that iris groups give it the common name Orthacheta bud fly. I have also seen the spellings Orthocheta and Orthochaeta. The one in this photo is about 1/4" long. The mouthparts are on the pointed end.

I have good luck with blue sticky traps (to catch adult flies) among the iris plants when they are up about 6", in addition to disbudding infested buds and deadheading. I pull the traps after blooming is done. I will always have the problem due to wild blue flags on our property.