Yardvaark, am hoping this is what you meant. For color coding, the green is the observed flow of rainwater as I described. The yellow dots are downspouts and the wavy blue line is our “crick.” The light blue line is a proposed rain garden. The problem area is circled in white and relates to the last pic in my original post.

You mentioned that removing the boxwood might have contributed. How do think so? As I see it, it shouldn't make much difference so long as you establish some plants as cover. Soil with plants and roots has protection. Bare soil is subject to washing. Mulch makes a little difference but not much. Can you tell generally where the line is that divides water that goes left from water that goes right?

What is the plan for the retaining wall mentioned? Where and how? Seems like you need one at at the front, right.

Water that lands in front of garage door goes left or right (as you face house from street)?

With getting a lot of water at the right of house, since it's narrow, it could probably stand some hard surface protection. Do you need steps there? If so, they should be recessed with cheekwalls. If you don't need them, you could create a flume, which is basically a swale of sorts that is protected by a hard surface such as concrete. Or it could be made of "cobblestones" (which could be brick, pavers or rubble, etc.)

Thank you for your thoughtful comments.

We were speculating that the boxwoods’ were acting as mini dams slowing down the flow and allowing more water to penetrate the soil as opposed to the more shallow sod that is there now. If you think it didn’t make a difference I will stop worrying about it

the driveway slopes down from the street level, levels off just past the sidewalk and then slopes up to the garage doors to keep water out of the garage. Thus, the downspout (the tiny yellow dot) on that side empties just where the lot starts sloping down toward the backyard.

we were thinking a retaining wall at the far right side enclosing the bed on that side. However, I don’t think it would impact the wall o water gushing down the sidewalk and cutting into the area directly in front of the proposed retaining wall. That is the main focus right now.

the rational behind adding steps cut into the slope was to channel the water down the drop off at the corner, leading into a gravel bed along the side of the house and eventually into the proposed rain garden. We were not intending to build anything more elaborate with our limited skills.

Sod is perfectly fine to slow water (neither Boxwood or sod slow it much) and allow it to penetrate the soil.

Even with the retaining wall, soil need to be graded to slope down away from it, channeling water toward the lawn. If the lawn is growing well, it could protect the earth from erosion from running water. But if the flow becomes too much or plants are not growing well, then a hard lining to the earth (flume) may be necessary. A set of steps may do the job of a flume if they have cheekwalls and are set into the grade like a channel, not above it. I'm thinking you need improved plantings or flume. When it gets shady grass is not going to grow well, so consider the need for a groundcover if the washing occurs in a shady area. Building a flume would be a lot easier than building steps ... not one like along the freeway, but one made of stone. Think of it as a cobblestone sidewalk that is dished out so as to carry water. Like the steps, it would need to be set into the grade, not above it. One would not need to construct it with as much precision as if building a patio. It could be kind of rustic. A bumpier surface would slow water more. It would be like a gutter for the yard.