This is a plant that I'm unfamiliar with since I live and work in Kentucky.  However, I am an arborist so I know about tree establishment. The amount to irrigate a newly transplanted tree/shrub is going to vary based on soil, site, tree species, and mulch.  Every newly transplanted tree should have mulch around its base to keep the water you apply from evaporating and deterring weeds.  And yes, the nursery was correct in saying that similar symptoms show up in the above-ground parts of the tree from both under- and over-watering. 

All you can do is try to maybe apply more water than you have been if the soil does indeed seem dry.  I read once these trees are established, they are very drought and heat tolerant.  However, you may still be in plant establishment phase (which can sometimes last 3-5 years).  Any tree is going to grow less in hard, compacted soil and therefore have less root mass as well.

One information sheet I read about these trees say that the roots will seek out water so applying water over a wider area may encourage a better, more dispersed root system.

I'm not sure if this helped.  Since you are in CA and don't go through a harsh winter like we do, it would be worth some continued TLC for the next several months. However, if stems snap instead of bend, they are dead and will not come back to life.

Good luck!