We had the same problems with the caterpillars. During the warming hours of early morning when the sun is just reaching the plants you can sometimes catch them outside the bud warming, much easier to see when they are still small. When you saw drying bud in the cola you were probably seeing where the stem had been chewed through, died and was drying out, I think this is about as an early warning as we get that there is a problem with a bud. Caterpillars don't lay eggs, you were probably seeing their poop, when that gets wet you probably will have mold start at that spot. By the way when we had to harvest when wet (and cool) when we swung the branches to dry them some, we flung out a few more. They don't seem to hold on so well when cold and wet.