When you took it out of its pot did you tease the roots out? It is very possible that the roots are still in a tight ball and not getting any nutriment or water from the soil. I would suggest lifting it in September, say, and looking at the root ball.

"It will thrive on any fertile free draining soils provided they are not too dry. It makes an ideal shrub for the small garden because it is quite slow growing and flowers during the late winter when most other plants are dormant. Daphnes hate transplanting and should only be pruned when absolutely necessary" " It likes plenty of moisture in the growing season"

Those .are quotes from the BBC and the RHS, so it does sound as though you're treating your plant as per. advice, unless it hasn't had enough watering.

They both make a point of saying that Daphnes hate being transplanted, so that's not a good idea - it would probably die if you did try that.

Do look at the rootball, though - as Bulbaholic suggested. I lost a small Prostanthera shrub due to this very reason.