Even though the bush is getting water 3 times a week, most likely the original rootball is drying out excessively. Feel it to know for sure.

Here's some great advice on growing gardenias.
Renee

Here is a link that might be useful: the Infamous Suicidal Gardenia Thread

1 inch of water 3 times a week is 3 inches of water a week.
Your drowning the plant.
Full sun, that is a no no.
Gardenias don't like hot afternoon sun.
They can't take that amount of water, and you shouldn't water your lawn that much either.
If you go into photobucket, look at the pics you tryed to post and click on the HTML tag, then post that in the box that you type your message in, then we can see your pic.
What is your zone? 6? 7? 8?
What does your soil look like?
Was it sandy?
If it is browning from the bottom up, it is dying from root rot because you are drowning it.
Don't worry about yellow leaves that much, worry about brown spots and leaves.

Thank you all for the input! It's frustrating because I'm not sure if the plants are not getting enough water or getting too much water!

I am in zone 7 with clay soil (amended with a bunch of compost). The area where the plant is in the ground has good drainage. It is yellowing from the bottom up.

Can you view these images now?

http://i60.photobucket.com/albums/h15/nfowife/Gardenia/DSC_8121.jpg?t=1286883125

http://i60.photobucket.com/albums/h15/nfowife/Gardenia/DSC_8123.jpg?t=1286883125

I can't see your images.
You have a photobucket account.
Under the pic in Photobucket, click on HTML tags.
Hit Shift and then the letter C on your computer to cpoy it.
Then come back to Gardenweb and Bring up a posting screen
and then hit your Shift and then V which will post it on the Message box.
Gardenias need a little special care in CLay soil.
Clay soil is rich and nutricious, and holds LOTS of water
which is what Gardenias can't have.
Their roots have to dry out totally between waterings.
THey really are not hard to grow, they don't need alot of water, they like it dry dry dry between waterings.
Make your gardenia ask for water, make it sag a little bit.
You amended your soil great, but in clay, I would mound it up when you plant it. Create a little mound so that the roots and plant is actually a little above the ground level. (Do you know what I mean?)
That way the drainage will be alot better.
You planted it fine, you just didn't mound it.
You can't have it on a sprinkler system.
Hand water once a week, if that, when the plant looks like it needs water, it will droop a little, then water it.
Better to keep it dry and make it happy with some water, then to kill it off with overwatering.
If you mound it and stop watering it, it should be fine.
DOn't water it after you mound it up, leave it alone and make it ask for water.
Don't fertilize it either, it doesn't need food, you stressed it out. Feed it next spring if you really feel you want to, other wise, leave it alone.
I couldn't see your pics, sorry, but remember what I said about the browning from the bottom up.
GOod Luck and I hope she blooms great for you next spring.
Don't fuss to much over the Gardenia, it will be fine.

Did you mean to imply that you have the irrigation system set to deliver THREE inches of water per week? Or ONE inch divided by three times? 'Cause three inches of water would be a heck of a lot of water! Enough to cause problems for all of the other plants on the irrigation system. Clay soils hold on to water for a long time, and plants can access moisture for a long time. You might even consider turning the irrigation off for the winter and just hand watering your new plants upon occasion.

I don't think that it is all that unusual for gardenia leaves to turn yellow and fall off. My advice is that you dig around into the actual root ball with your fingers to judge the moisture level of that root ball. As Jean says, it is VERY common for the root mass of a containerized plant to repel water. Newly installed plants need some extra attention for that reason. This is when a plain old watering can comes in handy.

I don't think that allowing your plant to wilt is a particularly good idea, but over doing it with the irrigation system is never conducive to the production of new roots.

So, to be honest, your plant could actually be having problems with too much water as well as too little (at the root ball). Don't let that be frustrating....it's very, very common. And one hundred percent correctable.

Do you know what kind of gardenia it is? The foliage looks different from plants that I have known.

When you plant any containerized shrub, you need to break its root ball apart and spread out the roots in fan-like fashion. You also need to make sure the plant is "riding high" with its roots just at the surface of the soil, or slightly above the surface of the soil. If you didn't disturb the roots, yank that plant up and spread those roots out. Like Elvis, the plant will say, "Thank you. Thank you very much." It's certainly not unsual for even happy gardenias to drop leaves this time of year, not to mention those that have been stressed out by one's gardening endeavors.

So it sounds like the theme is that I'm over watering the plant! Yes, I am watering my bed three times a week with each time amounting to approximately 1 inch of water. What should it be? The bed gets sun until 3-4 pm and then is full shade. Temperatures here can easily remain in the low 100s for days on end; however, they are now in the 70s and 80s during the day.

I'm not sure which type of Gardenia it is. I'll have to get back to you on that.

So when I plant a new plant I should break apart the potting soil it came in and see the bare roots? It just seems that I would be damaging or stressing the plant to do that. Do I do that for all plants such as annuals when I plant those in my landscaping beds?

Thank you all for your help on this!!