Dwarf Alberta Spruce always die

For the past three years I've gotten a living Dwarf Alberta Spruce to use as our Christmas tree. When Christmas is over we take off all the ornaments and sit it out on the patio where it receives sun and rain. In February I plant it in the ground and by May it's DEAD:-( This has happened every year and I don't know what I'm doing wrong.
This year in particular my wife said to just throw it out after the holidays. But I just can't bring myself to throwing something living in the yardwaste cart. It just seems so wrong. By the time I planted it this year it was already losing many of its needles. Right now it's planted in the ground where it receives sun for at least 10 hours a day. I also give it water at least 2 times a week since we're not getting much rain here in the San Francisco bay area.
Currently the tree has lost ALL its needles. I broke open one of the smaller branches and noticed it was green inside. The branch wasn't dry either, it didn't snap easily. So I'm not totally convinced the tree is dead. How long should I wait before I dig it out of the ground? Is it possible the tree will come back to life and grow new needles? What am I doing wrong? Too much or little sun? Too much or little water? Poor soil? The ground in our area bakes hard as a brick and is very difficult to dig a hole. I usually mix in some tree and shrub soil to give everything a boost and to loosen up things.
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Back in the day, if a tree was out of the ground more that 2 hrs the person was fired. If the tree was dug before the planting site was prepared (not just a hole in the ground) he was fired. My professor used to work for a nursery as a youngster. Other than that here is some tips for planting and mulching. Not all the answers, which I do not have. Planting http://www.treedictionary.com/DICT2003/T/tree_planting.html
Mulching - http://www.treedictionary.com/DICT2003/M/mulch.html
Sincerely, John A. Keslick, Jr. Consulting Tree Biologist www.treedictionary.com Beware of so-called tree experts who do not understand tree biology. Storms, fires, floods, earthquakes, and volcanic eruptions keep reminding us that we are not the boss. Some people will buy products they do not understand and not buy books that will give them understanding.

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Here are a few thoughts: Don't keep a living tree inside for much more than a week. Too hot and dry in most homes. No lights on it. Mist it daily if possible Why are you waiting until Feb to plant? When you buy the tree, go out and dig the hole before you even decorate... Make the hole so that the tree will sit at the same depth as it is in the pot. Take the pot and set it in the hole to be sure. Make the hole at least 2x as wide as the pot. Make the hole with rough edges, too smooth is too like a container.
When you remove the tree from the house, right away not in Feb, (Feb can have some pretty warm'/dry weather, plant when its cold) check the roots and gently loosen some from the root ball. Water thoroughly replacing the original soil. No amendments ( the roots will stay right in the hole not spreading out)
Remember the SF area is not this tree's preferred habitat;native to Canada and far Northern US, it likes some cold winter. It may be too warm in your area in the winter for it unless you get some freezing temps. If you are in a hot summer area, give it some afternoon shade.
For the present tree, you might want to dig down and examine the roots, are they growing, are they extending out or are they still in the same root ball. If they're not growing out, dig it up and start over. Also be sure that the water is going deeply enough.
Good luck Emilie NorCal
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