We noticed that one of our rhododendrons was looking poorly as it bloomed this spring while the ones right next to it were fine. After the bloom ended, the leaves started to yellow and curl. This was all during the terrible rains we had this spring. We also noticed that the ground around it was quite wet. Is this what has caused the decline and is there any chance of saving it?
Rhododendrons that sit in soggy soil for an extended period can be quickly knocked out by a soil fungus known as phytophthora. You cannot save it. Here is the lowdown: http://extension.umd.edu/learn/ipm-series-azaleas-and-rhododendrons-hg51
If you want to replace with a rhodie, choose one with resistance to phytophthora.
So, will the other rhodos near it become infected also? If this is a soil fungus, does it stay in the soil once the shrub is removed or will it be alright to replant there (using a phytophthora resistant species?)
That fungus is everywhere in the soil, but it only becomes a killer when plants are stressed by too much water. So, no, it won't affect your other rhodos. And, yes, you can replant there with a resistant variety.
Be sure to read the webpage. You'll have to scroll down, but it will all be clear then.