If you are sure this is an incense-cedar then the reason that the tree died is likely a combination of things. The 4 year drought probably stressed the tree out causing other possible agents such as root rots and beetles to further stress the tree and ultimately die. The sap on the bark leads me to think beetles were part of the equation. You can check by pulling the bark back where the sap is and seeing if there are any patterns of sawdust with larvae or eggs in them. If this is the case, it may have died in the spring and took until now to dry out. You should be able to harvest the tree and use the wood. If it is beetles then they likely left the tree already and there is nothing you can do further except watch your other trees and try and keep them healthy by making sure they receive adequate sun, water, reduced competition with other plants, and no compaction around their roots.  

If this tree is actually a port-orford-cedar then this sounds a lot like a common root rot that is particular to this species, which would require some more specialty care. If you are sure of the species this isn't an option. You can send me more pictures of both sides of the needles and any woody cones or seeds you see if you want to double check the species with me.