i had the same thing happen last year. i believe it was a combo of three things (partially based on what i read here):
1. too much sun - it was already warm when i planted and i had three or four plants put up shoots and leaves which consequently shriveled up. The ones that had a little shade to start with did okay.
2. not enough water. i was afraid of over-watering too. this year, i transplanted two plants and cut 8 more rhizomes. the two plants are getting one gallon a day, the others (not sprouted yet) are getting 1/2 gal per day. my soil drains well and it had been sunny.
3. planting too late in the season (mid-may) which is not one of your problems.
my cascade plant is doing pretty good, but it is already showing signs of nitrogen deficiency. it did not have mulch in the mound when i transplanted it - i was in a hurry. i have since applied very small amounts of 10-10-10 twice. i understand lots of nitrogen is needed when these plants are small - they are building up root systems...a butt-load of roots. it looks like a small plant on the surface, but there is a lot more going on down below.
check out the freshops.com site... there is guide (with pics) as to what the different types of deficiencies look like, as well as fungus and other pests.