By any chance, did you happen to actually observe any of the larvae eating the leaves of the Psychotria leaves? I ask only because in your photos, all the bite marks are browned edged, indicating the chewing took place maybe 1-2 weeks before. That, and I have yet to find any geometrid larva eating Psychotria (though I concede, it may be possible).
Can you say where you saw them? Also,
the "nest" is a loosely woven cocoon.