Is the bud rot? What to do?

cut it out with a wide margin around it. better to cut extra off than to leave some behind. if oyu see dead sugar leaves along that stem, good chance it is creeping along the stem, unseen. inspect, gently - without damaging, spread a bud out so you can see the stem underneath. any grey or white fuzz is bad, obviously. the dead sugar leaves are a sign to check. that will happen before the buds are discolored. that's easier to find, obviously. when to harvest? depends on how fast it keeps spreading and how much time you have left etc etc.. different choice for every person. if you don't see it elsewhere, and it's one plant of many, i'd cover (prevent more spores spreading from agitation) the plant and remove it. even that won't guarantee anything... it spreads before you see visible signs. "washing" buds does not disinfect them - whether rot or mildew.