Two years ago I bought a house that had been empty from foreclosure and all the landscaping was dead except for one large cottonwood tree that was half-dead from drought. I worked to save it, had the dead branches cut off and painted, and watered it religiously. Last year I even built a moat around it that I layered one-third each with the original ground mixed with mulch, then peat moss and then bark. I did this so that when it was watered it would keep enough in the moat to survive.
This year for the first time it looks great, with lots of healthy leaves, but while working in the yard I noticed dead bark lying in strips on top of the bark on the East side (facing street) of the tree. What is causing it? Disease, bugs, too much water? Can I do anything to stop it, like painting all the inside areas of the barkless side? Please answer with a solution, as I can't afford to have it removed, and I don't want it to endanger my house.