Definitely black knot fungus. Ram, get in touch with your local county extension office to learn how (and when) to control this serious fungus disease.

Thanks Ken, I'm from Ohio. Last year it was fine, it had a dusting of yellow on the upper branches. This year it's not so much a dusting as it is a yellow/green blend with the different needle structure. I kind of figured these things grow at different rates based on the weather, how much watering, etc. I just find it strange how different the growth is and wanted to make sure it wasn't trying to revert or die off. We did have a bad winter, lots of rain last month (but the needles started to look like this right out of the bud back in April when things were dry). No amended soil and no fertilizing. We do have clay soil, but almost everything I have are planted in high spots in the yard so water drains away. Here it was from last year before planting... it's from Western Evergreen I think... it looks big for the pot but the roots weren't tangled because of the potting mixture. As you can see it was a bluish grey last year with a lot of yellow. This year it's a dark green with yellow mixed in every needle not just the ones on the upper branches.

Looks like you bought a fairly lanky tree. Unless it's put on phenomenal growth during the year and a half you've had it, the tree was probably pretty spindly to start with. It's hard to tell from the picture, but it looks like possibly most of the bend is occurring at one location. It looks like the tree starts out of the ground fairly strait, bends just below the first few branches, and then continues on relatively straight. Is that what's happening in real life? If so, examine that part of the trunk and see if you can tell what's going on. Another thing that's hard to tell from the picture is whether the tree is stretching for light. Is the top growing towards an opening to the sky? I do notice that there seems to be plenty of shade around the tree. I think it might be a good idea to figure out what's happening with the tree before we start pruning.

I guess I'm going to have to just leave it alone. If memory serves summer isn't its fastest growing period. Hopefully this fall it'll resume normal growth. I can't see unstaking it - when it leaned over I figured it must have been damaging the root structure, or at least hindered regrow. thanks for your help!