Our neighbor's Birch has gigantic nests of what appear to be caterpillar colonies, hanging like gossamer hammocks from above. This one isn't even the biggest cluster in this tree. There's one that looks like it has thousands of dormant worm-shaped creatures, just hanging there. It's ominous.
My Aunt had a similar situation in Seattle a number of years ago. Something was hanging up in her tree and when it broke open, tens of thousands of caterpillars came raining down. She had to call an exterminator and she felt like she was in a gardening horror film.
I've decided to cross off "Birch" from my tree-planting list.
Update: I recently read in the Oregonian that these particular caterpillars are harmless to the tree if they show up near the end of summer/beginning of fall. They'll eat the leaves but the tree will survive. It's when they show up in the beginning of summer that you've got to panic. I mean, you've got to get rid of them, by pruning and tossing.