Kate, I agree, sounds like Cottony Psyllid.

Here's an article I found....

Cotton Ash Psyllid: Kicking Ash while they are down

(Article Published in the Calgary Gardening Magazine  Calgary Horticulture Society - May/June 2005)

By Robin S. Adair

As little as 3 years ago, I was recommending that homeowners plant Manchurian Ash Fraxinus mandshurica and Black Ash Fraxinus nigra. "They are hardy to this area" I would say, "These two trees have a nice shape and they donÂt have many predators." I have since changed my tune. With the arrival of the Cottony Ash Psyllid into CalgaryÂs urban forest in the last 2-3 years, 80-90% of the Black and Manchurian Ash trees that I have seen have been ravaged by this pest. One can only guess that with the drought that started at the turn of the century, this pest has overwintered well and can now be considered an infestation.

Signs & Symptoms

Also known as tree lice because of their white/cottony appearance, the Cottony Ash Psyllid injects a toxin into the leaf that curls the leaf and creates a little cocoon wherein the Psyllid hides from predators and tree-spraying equipment; and feeds on the leaf.

Compound ash leaves start out healthy in the spring and then quickly start to curl once the nymph (immature) stage of the insect begins feeding. Once the leaves are curled, they are photosynthesizing less and may prematurely turn yellow. In the next year the tree might also have tip-kill and may only produce shoots from its trunk. Successive yearly infestations can lead to tree death as the treeÂs reserves are tapped out.

Swamp Ash

In any pruning courses I teach, my main theme is to keep the trees well watered, pruned and fertilized, and they will be able to tolerate much of what Mother Nature can dish out. However, if the tree is planted in the wrong location, it may be doomed anyway. Black Ash trees are native to Eastern Manitoba, and out east they are referred to as Swamp Ash. Therefore, one can only deduce that with CalgaryÂs current and future drought patterns this tree would do best if it were planted in a wetter area of the yard. For Black ash trees planted in front yards prone to chinooks or drying winds, only a minor infestation of Cottony Ash Psyllid could send the plant into shock.

Control

Since the Psyllid lays its eggs in leaf scars and bud tips to overwinter, dormant oil sprayed in early spring may be effective. Spraying Trounce (soap/permethrin mix) as the nymphs emerge in mid to late June has been found to provide even better control. The timing of this application is critical for success; just after bud break but before the leaves curl. There is a second generation of nymphs that appear in the last week of July but are tough to spray because leaves are already curled and there are lots of places for the Psyllid to hide.

Here is a link that might be useful: Helping Customers Grow

Thanks Sharon. Great article. Thanks for posting it.
Kate