Yeah, pretty much, Chris. There IS such a thing as being too warm in cold temps.
Normal perspiration is used to cool your body. I’m sure you know about that.
Insensible perspiration – you perspire a certain amount of water off your body even if you don’t need to perspire for cooling. It keeps the outer layers of your skin fairly flexible, because those cells are usually dead cells. In addition you secrete oils and urine and a variety of other things in much lesser amounts through your skin. It increases the waterproofness of the skin, flexibility, callus formation and maintenance, hair maintenance, some immunity, etc. You normally don’t see much evidence of this. But it is normal to loose about a half liter of water or so, even when you are mostly cold. This is like saying you dumped a cup of water in your sleeping bag.
In colder conditions, this will leave the warm environment of your body and condense in the down.
Normally, say you are using a 32F bag at a 32F temperature, enough will eventually evaporate off your bag to cause no problems. You wake up and your bag is dry in 5minutes or less due to remaining heat.
If you use a 50F bag at 32F, you might be too cold to sleep but your bag will be pretty dry. (This is what most would say is in the extreme or survival rating of an ISO(EN) rated bag.)
Above freezing, there isn’t much of a problem, because it allows the condensation to collapse the down, removing some of the insulating value. It will stabilize at some cooler level, causing less perspiration from you as you get a bit cooler. As an example, a 20F bag actually now insulates you at 32F, balancing heat loss and condensation at fairly comfortable levels. (Down will do this naturally where synthetics will not. Synth fills don’t collapse when damp. Anyway…) Your bag will feel slightly damp in the morning, but leaving it spread out, it will dry pretty quickly…usually in 10-20min. Even at 32F, the residual heat will cause it dry or mostly dry in that time.
The final case is when you are at 20F or lower and you have a -40F bag. The water still condenses in the down (and of course it migrates,) but instead of remaining a liquid, it freezes. Sometimes you can feel this. After a midnight run you can feel that your bag feels a bit stiff. Not too bad the first night. The second night it gets a bit worse as you add more condensation, and so on…it isn’t leaving your bag, it is frozen in. You have to take extra effort and precautions to encourage it to dry out.
Yes. A breathable jacket/shell/fabric will NOT work as a VBL (Vapor Barrier Liner.) Equinox, Western Mountaineering makes a liner for bags. I would suggest a silk liner or something inside though, I never cared for the damp, clammy feeling. You can make a bag liner out of an emergency blanket and some duct tape. It works OK provided you can keep it pulled up enough…cheap enough to try one out.