Yuck!!!
I would cut all the growth that is turning brown, get rid of it, and maybe spray some water with soap in the leaves, this could help kill the worms.
If there´s any better idea, don´t make anything of what I said.

That's one of the pine needle miners. I'd call your local extension office for recommendations of control measures and the timing of such measures.

Will they kill a tree or just damage the new buds? I pulled out the brown needles and several had worms in them, maybe 4 or 5 that I saw and then I sprayed some soap water on the affected bud areas. You know, a few months back something laid some small white eggs on a branch that looked like butterfly eggs. I'm thinking now that it was a bad idea to leave them! I'm pretty sure that was what got into the buds.

Yeah, I only leave eggs if I am quite sure of what layed them. Every year, these butterflies lay their eggs in my passiflora, and it´s quite fun to see them grow, I even capture some to see them develope more closely. What´s not fun is when sometimes worms eat the flowerbuds.

Pull off the brown needles, and you'll get most (if not all) of the caterpillars.

Resin

They won't kill your tree unless the conditions are right. Such critters are the result of drought and such attacking weakened trees.

Dan

We are heading into our 4th year of a drought. Thanks for all the info... I'll keep my fingers crossed.