diff --git a/scripts/devserver.py b/scripts/devserver.py
index c413a6d..b041162 100755
--- a/scripts/devserver.py
+++ b/scripts/devserver.py
@@ -28,7 +28,6 @@ import shutil
 import signal
 import subprocess
 import sys
-import time
 from pathlib import Path
 from sys import stderr
 from threading import Thread
@@ -241,37 +240,78 @@ def run_caddy(origins: list[str], vite_port: int) -> subprocess.Popen | None:
         stderr.write(f"┃ ⚠️  Caddy couldn't start: {e}\n")
         return None
 
-    # Wait briefly to check if Caddy exits immediately (e.g., port binding failure)
-    time.sleep(0.2)
-    exit_code = caddy_process.poll()
-    if exit_code is not None:
-        # Read and display stderr output, filtering and formatting JSON log lines
-        caddy_stderr = caddy_process.stderr.read().decode() if caddy_process.stderr else ""
-        stderr.write(f"┃ ⚠️  Caddy startup failed\n")
-        if caddy_stderr:
-            for line in caddy_stderr.splitlines():
-                if not line:
-                    continue
-                try:
-                    log = json.loads(line)
-                    # Filter out info-level messages
-                    if log.get("level") == "info":
-                        continue
-                    # Filter out expected "admin endpoint disabled" warning
-                    if log.get("logger") == "admin" and "admin endpoint disabled" in log.get("msg", ""):
-                        continue
-                    # Format: [level] logger: msg
-                    level = log.get("level", "?").upper()
-                    logger = log.get("logger", "")
+    # Read stderr line by line until Caddy signals it's ready or exits
+    # Caddy outputs JSON logs; "serving initial configuration" means it's ready
+    ready = False
+    while True:
+        exit_code = caddy_process.poll()
+        if exit_code is not None:
+            # Process exited - read remaining stderr and report failure
+            remaining = caddy_process.stderr.read().decode() if caddy_process.stderr else ""
+            stderr.write(f"┃ ⚠️  Caddy startup failed (exit code {exit_code})\n")
+            if remaining:
+                for line in remaining.splitlines():
+                    if line:
+                        stderr.write(f"┃ {line}\n")
+            return None
+
+        # Read one line from stderr (blocks until data available)
+        line = caddy_process.stderr.readline().decode()
+        if not line:
+            continue
+
+        # Try to parse as JSON log
+        try:
+            log = json.loads(line)
+            msg = log.get("msg", "")
+            level = log.get("level", "")
+
+            # Check for ready signal
+            if "serving initial configuration" in msg:
+                ready = True
+                break
+
+            # Show errors/warnings to user
+            if level in ("error", "fatal"):
+                logger = log.get("logger", "")
+                if logger:
+                    stderr.write(f"┃ [{level.upper()}] {logger}: {msg}\n")
+                else:
+                    stderr.write(f"┃ [{level.upper()}] {msg}\n")
+
+        except json.JSONDecodeError:
+            # Not JSON - might be sudo password prompt or other output
+            # Pass through to user
+            stderr.write(line)
+            stderr.flush()
+
+        if ready:
+            break
+
+    # Start a background thread to drain stderr and show errors
+    def drain_stderr():
+        while True:
+            line = caddy_process.stderr.readline().decode()
+            if not line:
+                break
+            try:
+                log = json.loads(line)
+                level = log.get("level", "")
+                if level in ("error", "fatal", "warn"):
                     msg = log.get("msg", "")
+                    logger = log.get("logger", "")
+                    # Skip expected warnings
+                    if logger == "admin" and "admin endpoint disabled" in msg:
+                        continue
                     if logger:
-                        stderr.write(f"┃ [{level}] {logger}: {msg}\n")
+                        stderr.write(f"┃ [{level.upper()}] {logger}: {msg}\n")
                     else:
-                        stderr.write(f"┃ [{level}] {msg}\n")
-                except json.JSONDecodeError:
-                    # Not JSON, print as-is (e.g., "Error: ..." lines)
-                    stderr.write(f"┃ {line}\n")
-        return None
+                        stderr.write(f"┃ [{level.upper()}] {msg}\n")
+            except json.JSONDecodeError:
+                stderr.write(line)
+
+    drain_thread = Thread(target=drain_stderr, daemon=True)
+    drain_thread.start()
 
     def cleanup():
         if caddy_process: