Issue with Chinese Elm, one day leaves on the tree, next day they fell off!

I'm located in Southeastern, PA, to begin with.
It's a smaller sized Chinese Elm, I wanted to pick one up to see how it would do and go from there.  I had figured it would fair well, but after about a month of caring for it, the leaves kept steadily looking dry, on and off, then a few yellow leaves here and there.  It had been kept outside for the entire time I had it thus far except on occasion when a few sever storms cropped up.  I noticed about two weeks ago it developed a little bit of very this white powder on its trunk, like a ring of mildew perhaps?
I noticed that the soil would often look dried up, regardless of my regular watering.  I figured perhaps it was over watered, so I let it go for about three days with no water....the soil had just started getting dried out so I soaked it.  A few days went by and again, after daily watering once a day it looked a little dry.  I soaked it, and that evening the leaves were starting to drop off, they were dry...the next morning, they were all off the tree.  

Now, we did have this severe heat wave for about two weeks which only broke last week.  Would the intense heat be at fault?...would there be some fungus attacking it?
I'll get a snapshot of it early tomorrow, since its dark right now.

Thanks in advance.

-Jason

Pictures please and tell us more about the "white powder".

Did the leaves turn bright yellow and fall or were they crispy brown when they fell?

I doubt the heat can be blamed. I have 3 on benches in full sun all day and they seem fine. I'm not far from you and we had 4 or 5 days of upper 90sF and heat indecies of 105+/-. Sounds like a root problem, especially with the odd watering that you had to do.

Here's a photo of the tree as it is now.  Yes that's a little plastic container I had used in a pinch for a makeshift humidity tray.  I had worried about it getting a little dried out.
The "white" powder can be seen on the root area, like little specs.  I'll try to get a better photo of the specs.

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Of course this is how it looked when I initially got it.


As far as the leaves go, they were all green with only maybe 7-8 being yellow, the rest were green, but looked sort of crispy, many were starting to become dried out yet still green. Then, the next morning, they were almost all off the tree. A few, maybe 8-10 are still on the tree at various areas.

Where did you buy it from?

As far as the leaves go, they were all green with only maybe 7-8 being yellow, the rest were green, but looked sort of crispy, many were starting to become dried out yet still green. Then, the next morning, they were almost all off the tree. A few, maybe 8-10 are still on the tree at various areas.

to me, this sounds as though it dried out for 3 to 4 days.  Long enough to dry out, but not long enough for the leaves to react to a slow death.  If the leaves were green but crispy, that tree didnt suffer, it was quick.

BUT, I've had elms do goofy stuff and come back, to my surprise.  If it were mine, I would make sure not to drown it because the leaves are not using any moisture right now.  Put it in the shade, or better yet, in the ground in the shade and check it next spring.  It just might surprise you.

Funny thing is, there are still about 7 or so leaves that are perfectly fine,...completely healthy looking! I know my photos could be better, but indeed they are there!
 

Well, so much for it having died out, or being in dire straits!!!  

Looked at it this morning and there's a ton of new budding all over the tree!