First, digging a hole of the type you might create for a tree is counter productive. Much better to plant on the surface or create a wide, shallow depression.

Second, putting rocks in a hole (or pot) actually makes the drainage worse, not better.

Third, don't use peat at all. The stuff available in bales everywhere is dust-fine, dies out with astonishing speed and then actually repels water.

The best planting medium, IMHO,for rhododendrons and related species is coarse, but partially decomposed softwood bark. The bark has mild anti-fungal properties itself, but it's chief benefit is that it supplies the roots with vital oxygen while still maintaining moisture.

To answer your question. Root rot is nearly always fatal.

Maingrower gave you good advice on the next planting. Use a raised bed.

Is Schep Laurel similar to Sheep Laurel, Kalmia angustifolia, aka lambkill, sheepkill, wicky, dwarf laurel, and pig laurel.

It takes partial shade to full sun. It is often touted as tolerant of heavy shade, but plants under those conditions are very thin and open and bloom sparsely.
It requires a cool, moist, acidic, organic soil for best performance and you should avoid windswept sites.

Nothing likes its roots in water except bog plants, and it isn't a bog plant.