Several of my pittosporums are in distress, and going downhill fast. They all share one characteristic - peeling bark. I checked for ground vole activity, but I don't think that's an issue. I've read that too much water can cause bark to peel, but I have specimens growing happily in very low lying areas w/o bark peel. Once again, I'm perplexed and disgusted.
It sure does look like Botryosphaeria! Maybe the cold winter - and a little vole activity? - stressed them and made them vulnerable to this disease. I'm going to give it another month to see if it can survive. I do have other shrubs not on the list which could replace it. I need a vacation!
Don't give up on your Pitts just yet. The same thing happened to three in my daughters yard and we cut them wayyyy back. Similar to the way you have yours. Since they had boxwoods in front of them, I said lets just see what happens. What did we have to loose ? They were 25 years old and removing them and replacing them with large shrubs was going to be costly. They came out beautifully and now look great. Hope you have good success with yours.