Thank you for the replies!
I don't water the foliage intentionally, the trees infected aren't very large so I can't really help it. What's weird is that the black fungus was found only on my Ishizuchi five needle pine seedlings, nothing was found on my Zuisho, or my other larger, more vigorous JWP, which has longer, greener needles and slightly different bark. One thing I love about JWP is their drastic genetic variation amongst seedlings.
Vance, I wanted to tell you that your articles on Mugo pines (e.g. Bonsai on the Cheap) were some of the first literature I've ever read on bonsai and it's helped me tremendously! So I definitely respect your experiential knowledge. I'm still looking for suitable Mugo pines in nurseries for pre-bonsai, but it's not easy! I actually got my info from Julian Adams, a legitimate authority on growing of JWP from seed, Zuisho air layer, and cuttings. At the same time, I don't underestimate the importance of understanding each local climate, and he's way down in southwestern Virginia. One thing I do know, from literature and experience, is that JWP seedlings have very sensitive root systems and need to be on the drier side than say Mugo or JBP. We've had an unusually cool wet spring here in New York, which may be the main contributor.
I plucked all the infected needles, mostly all last year's and older. The sheaths of some bunches of new needles had the black fungus too, but after I sprayed it with a fungicide (looks like milk) yesterday and this morning it's pretty much gone. So if I were to show photos, you wouldn't see any signs of infection. I plan to spray it every 10 days until I know it's completely gone.