Nothing quite like forcing a drought stressed tree to put out loads of new leaves. I'd say take some pictures that way you have something to remember it by.

You must have a species of Beetle not present in the Southern states. I have several So. Magnolias that are 40-50 years old and have never observed any leaf damage on them. Some of these were very small, when planted and I also have numerous seedlings emerge each year and none have exhibited the type of leaf damage you describe. I checked the US Forest Service website (link below) and didn't find any mention of pests that cause that type of leaf damage to Magnolia grandiflora. They probably will not cause any permanent damage to the tree, but you may want to try trapping some of the beetles by using some of the sticky fly paper products and take or send them to your local Cooperative Extension office (County Agent) for identification, assessment of probable long term tree damage, if any, and any recommended abatement proceedures. Since they aren't trunk/limb borers, the possibility that they will cause the tree to die is rather small. Good luck! Rb Here is a link that might be useful: Magnolia grandiflora

The yellowing and dropping of leaves in the spring is normal for Southern Magnolia. Young trees often shed an excessive amount of foliage. The browning of foliage is probably due to the standing water, which blocks oxygen from reaching the roots. Although Southern Magnolias can tolerate occasional flooding, as well as drought conditions, a young tree struggling to become established is probably less amenable to extreme conditions. If you have a thick layer of mulch over the roots, I would pull it back temporarily to allow the soil to dry more rapidly between downpours. Hopefully you will get a break in the weather soon. Rb Here is a link that might be useful: Southern Magnolia

Update - July 1, 2008 I am trialing some of the hardier Southern Magnolia (Magnolia grandiflora) cultivars in my Hamburg NY, yard. Here are the results as of July 1, 2008: 1) Unnamed clone from Appalachian Gardens - Regrowth is fair, however the tree is planted near a large Norway Maple that is slated to be removed this summmer. I am quite sure there is root competition from the Norway Maple... 2) 'Pocano' - Planted late April 2007. No tip dieback. Regrowth is extremely vigorus and tree looks very healthy. Has dropped some leaves, but has replaced them. 3) 'Edith Bogue' - Planted late April 2007. leaves look same as last fall, no tip dieback.Bought from Forest Farm Nursery and is grown from a cutting. Extremely healthy and vigorus growth and has dropped very few leaves from last year. 4) 'Bracken's Brown Beauty' - Planted late April 2007. Leaves look same as last fall. Has dropped few, if any leaves! Later to start into growth, however it is putting on healthy growth. was forming a flower bud, that I removed as the tree may redirect it's energy into growth. 5) '- 24 Below' - Planted in April 2008. This tree is growing quite good in it's first year in the ground.