Spruce bud worms are probably the worms that are affecting the pine needles. They could also be spruce canker worms or canker worms. It is necessary not to treat these insects with chemical insecticides as it may wipe out the helpful predator wasps as well. Instead opt for biological pesticides such as Btk. There are different types of diseases that can affect the Colorado blue spruce and depending on the pattern in which they affect a tree the type of disease can be classified or diagnosed. If the inner needles on lower branches are dying first or are affected first and the outer growth is green then the problem is rhizosphaera needle cast. On the other hand if the outer and inner needles of the lower branches are dying first the problem could be cystospora canker.