You may want to repost this question in the conifer forum, there are some guys in there who really know their stuff and can help you better. A word of warning - put pictures of the tree, including a pic of the bottom of the trunk/ground and also a close up of a branch, in the post or they'll complain about it!!

I'm no expert, but if this happened to me, this is what I'd look at:
1) was it planted properly? (not too deep, was it root bound when it was planted, etc.) Conifers can sometimes retain their needles for quite awhile even though they are dying...whatever has injured it may have happened earlier than you think.

2) Was it actually getting enough water throughout the summer?

3) Chlorine in the water?! :0 I have no experience with chlorine in tap water, but that sounds like that could certainly kill plenty of plants. Do you water all your plants with it? Do they seem fine? If nothing else is bothered, I doubt it would hurt the larch. Don't worry about the water temperature, that won't make the tree drop it's needles.

4) Check for spider mites or other bugs/oddities.

5) Has anything been sprayed anywhere near the tree? Sometimes spraying on a humid day, even a little ways away, can drift onto things you don't want it to.

6) My guess would be that it was somewhat root bound when you planted it, and with some of the heat we've been getting this summer, it was losing more water than it could take up through it's small root system. I usually find for the first year after planting, especially with something that has been in a pot at a greenhouse, you have to be really careful not to let it get too stressed from heat or lack of water.

One more thing - where is the 25% of the needles that are still green? Is it one particular side that is brown? Or just the top, or just the bottom? It might help you play sherlock, if it is mainly on one side or something.

Thanks for the reply. I think I will post in the conifer forum if I can't find anything up close. I didn't even think to check for spider mites or other insects. It may have dried out some in the last 2 or 3 weeks, but now I've only been using water from the rain barrel to water it, not from the tap in case it is sensitive to the chlorine. We had over 12 inches of rain in June so that should have been plenty for it then. Also the remaining green needles that are left are on the ends of the branches. It was planted at the same depth as it was in the pot and I always tease out the roots if it's root bound to get those roots spreading. I'll keep a close eye, and watering can, on it. Thanks for your help!

If just this years growth is still green, it could be that whatever stressed it out happened either before you got it, or in the process of transplanting(possibly before the new growth had fully budded out). Losing needles this early in the year is certainly a bad sign, but I don't think it is completely unrealistic that it might look just fine next spring when it gets its new needles. It would be a lot more serious, IMO, if it was a "true" conifer. Wow, you guys got a lot more rain than us!

But yes, posting in the conifer forum - with pics - might give you some new ideas.

Yes, it's been a crazy spring/summer in Brandon. They're just starting to remove the super sandbags along the river and apparently yesterday proclaimed that the flood is now officially over, thank goodness! The rain certainly did slow down here in the early part of July and I have to keep reminding myself that the soil here is more sandy and less moisture retentive than my last property which was heavy clay and watering didn't have to be monitored quite as much there.

Thankfully I do have a one year guarantee until next spring on this tree, but I'd prefer to keep this one happy and healthy rather than start again next year. They're beautiful trees and I've wanted one for years, so I'll try to keep on top of it's water needs and hope for the best.

I'll try to get some pics of it on the conifer forum as well.