I had a Royal Red butterfly bush that developed a white fungus looking stuff at the base of the plant one year during the spring and summer, and it was dead by fall, as I remember. We had had a very wet spring and summer that year, and this bush was planted in a spot where it was crowded and didn't get much air flow. Since many fungus diseases develop under wet, still air conditions, I assumed this was the cause.

I never knew the name of the fungus, so, like you, I looked up fungus and fungus on butterfly bushes, but never found a picture or description that really matched it.

Since that time, I planted an Ellen's Blue in a raised bed in my garden - buddleias won't survive the winters, even down here unless you plant them in a raised bed or on a very well drained site, because they can't stand the wetness of our winters. This site is airy and not crowded, and the bush has thrived, being healthy and making lots of flowers.

So, if I were you, I'd plant any future butterfly bushes on a well drained, uncrowded site, and I wouldn't mulch it with leaves piled up on the base of the trunk, which I figure you might have done trying to protect it from Zone5 cold.

Sherry