The assumed straightforward connection between transmission intensity and disease occurrence impacts surveillance and control efforts along with statistical methodology, including parameter inference and niche modeling. Many infectious disease systems have the potential for this connection to be more complicated-although demonstrating this in any given disease system has remained elusive. Hemorrhagic disease (HD) is one of the most important diseases of white-tailed deer and is caused by viruses in the Orbivirus genus. Like many infectious diseases, the probability or severity of disease increases with age (after loss of maternal antibodies) and the probability of disease is lower upon re-infection compared to first infection (based on cross-immunity between virus strains). These broad criteria generate a prediction that disease occurrence is maximized at intermediate levels of transmission intensity. Using published US field data, we first fit a statistical model to predict disease occurrence as a function of seroprevalence (a proxy for transmission intensity), demonstrating that states with intermediate seroprevalence have the highest level of case reporting. We subsequently introduce an independently parameterized mechanistic model supporting the theory that high case reporting should come from areas with intermediate levels of transmission. This is the first rigorous demonstration of this phenomenon and illustrates that variation in transmission rate (e.g. along an ecologically-controlled transmission gradient) can create cryptic refuges for infectious diseases.