Green liquid with caterpillars normally means either stress or insecticides. Some species immediately spit when they are touched. Skippers are notorious for this reflex. Other species tend to spit when they have been exposed to insecticides. Because of this, green stains in with caterpillars is a sign of possible problems.
But their hemolymph (comparable to blood) is also green. When we see green, how do we know if it is hemolymph or spit? Simple. Spit stays green and hemolymph turns dark within five minutes.
Remember, oral and topical flea/tick medication is also an insecticide. The ‘medication’ (insecticide) is exuded by your dog’s body through his skin and dander. When you pet your cat or dog, you are transferring the insecticide from your dog’s body to your hands.
Use of insect spray/treatment even in rooms behind closed doors on the other end of the house can travel through the air and a/c ducts to the room where caterpillars are eating. A spray was used 30′ away from this habitat with closed doors between the habitat and the spray. Every caterpillar died.