"mixed the backfill soil 50/50 with peat moss"

Not a good idea, but it's hard to say for sure what is going on with these. They don't look too bad. I hope you broke up any circling roots? For the handful of us who recognize the problem and manage to care and/or not have any ulterior motives, this is a huge crisis right now in American horticulture. (poorly grown container stock with knotted roots...that can die from the problem 1, 5 or 10 years down the road)

I didn't untangle any roots. I believe I vertically scored the sides with a spade and roughed them up with my fingers at most. I'm pretty sure this garden center/farm field-grows their trees and shrubs, but these did come in large containers.

Well, that's better than nothing.

The two plants show the symptoms of excessive dryness at the roots. More than one factor is very likely involved. A dripper system may just not be delivering enough water run once a week or even more often. The tree in the photo is competing strongly for available moisture and nutrients. Once peat dries out, it is very difficult to rewet. It is also a very poor soil amendment as the dust-fine material sold in bales breaks down very quickly and can become either a soggy airless mass or a water repelling mass. Coarse amendments such as conifer bark are much better. English Roseum is a tough, hardy variety but you may want to dig up and replant in a better soil next year. The tree roots, however, will likely be an ongoing problem unless you're willing to employ some sort of root barrier.

This is the variety Roseum Elegans, which is a catawbiense hybrid or selection, not English Roseum. Is it a bad idea to dig them up over the next 2 weeks, while I am off from work? Can you kind of walk me through the process?

Should I try to remove the previously amended soil from the hole?

Should I remove any soil it came with from the root mass?

I have a pile of native soil from a patio project (top 7" of soil), should I use that soil amended with pine bark for the backfill? Do I need to screen the pine bark fines, or add it as-is?

What can I use as a root barrier, will those huge non-woven geotextile fabric pots buried in the ground work?

Thanks for your advice

"A big tough variety like Roseum Elegans can probably coexist with the
roots given a good start and extra attention to water and nutrition."

This is what I think. Trying to install a root barrier could for various reasons be counterproductive, in my humble opinion.

@davidrt28 what is the procedure to untangle roots that have become tangled in containers?

You basically just have to feel around and break them up or pull them apart. Rinsing the whole thing in water can help with some plants but probably not rhodies. Rarefind nursery recommended a 'butterfly' cut (see instructions in the catalog) and that probably works well for too.

Here are the instructions on the butterfly x cut, for rootbound potted rhododendrons:

http://www.rarefindnursery.com/media/pdf/Tree_&_Shrub_Planting_Guide.pdf