Hm... I didn't get any red flags at my interview weekend, but we were hardly a crowd (about 12 people). The students seem very intense and science-y, and are as satisfied as any other grad students I've ever seen. It rained on my weekend, so we didn't walk outside too much. The rumor is that Caltech undergrads are really odd (no offense to any reading), but the grad students seemed normal enough. I didn't hear about any funding problems or layoffs, except the common knowledge that 2-3 neuroscience faculty are leaving, rendering the neuroscience sector a bit on the limp side. This was the biggest complaint that I heard from the other prospective students there. I'm sure they'll have no problems hiring more young faculty, though. I myself am not in neuroscience, so it doesn't really bother me.