Not to scare you but those bulges on the trunk look bit like a symptom of pear rust... You'll get the suspicion confirmed or invalidated in spring when wet weather comes: look for orange slimey stuff (search Google pictures for "pear rust on juniper"). Hope I'm wrong.
Update: there is significantly less algae on the bark, and the black fuzz on the foliage is beginning to go away. I'm noticing piney foliage which I suspect is new given that most of the foliage is scaley. Some bark appears to be peeling where the algae was heaviest, but it might just be the algae flaking off. I still see the bugs move around when I apply white vinegar to the bark.
R3x, I had read about pear rust in the passed and was really worried about it, but it never seemed to ooze. I didn't know if those protruding bulges where branches that were cut stubby or not. I played with some and they seemed to be just weak wood material.
How can I confirm if its pear rust, and what can I do about it? I ordered tools online and was planning to use a concave cutter to remove the thinner bulges that look like tiny branches.