We present a study of the optical inhomogeneities and degradation of InGaN-based green laser diodes based on high-resolution cathodoluminescence (CL) investigation of the output facets and inner cross-section of the devices. The results indicate that 1) degradation originates from a diffusion process, which causes an increase in the threshold current. 2) Nanoscale-level CL points out the circular symmetry of the degraded area, which is wider than the ridge and includes not only the quantum wells but also the waveguiding and cladding layers. 3) The yellow luminescence decreases within the degraded region, whereas its intensity increases outside of the degraded region. 4) Wavelength fluctuations are found in both quantum wells and waveguides, which are critically analyzed and ascribed to inhomogeneity in indium concentration. Their possible effect in the filamentation of the laser emission is discussed.