Blue spruce pine issue
The gray-blue patches on the twigs are lichens. These are interesting organisms, however, do not cause disease problems. They live and gather sunlight on twigs or branches but do not infect the tree. Many lichens grow rapidly when exposed to full sunlight, which explains why we find them on stressed trees.
There are three principle types of diseases that affect blue spruce trees: needlecasts, tip blights and canker diseases. All of these diseases are caused by fungal pathogens. From your photos it appears that you have needlecast but may also have the others as well.
As the name implies, trees with needlecast diseases shed needles. Needlecast fungi often infect needles on the current year’s shoots. As the disease progresses, the needles die, usually the year following the infection. As a result, trees affected by needlecasts often have an outer “shell” of live needles on current shoots and dead needles on older shoots. The two most common needlecasts we find in spruce are caused by the fungal pathogens Rhizosphaera and Stigmina/Mycosphaerella.
Fungicides that are available are preventative. Well-timed sprays can prevent new infections. Time your first application next spring after the new growth has expanded to 0.5 to 1.5 inches in length. New growth typically appears in May. Follow-up with 1-2 additional sprays as indicated on the fungicide label. Fungicide applications will need to be applied for at least 2-3 consecutive years and maybe more. Currently fungicides that are labelled for control contain the active ingredients of either chlorothalonil, mancozeb or copper. Remember to read and follow the instructions on product labeling.
For more information –
What is spruce decline? http://msue.anr.msu.edu/news/what_is_spruce_decline_and_what_should_you_do_about_it