Ok...Ive had a Gouldian in quarantine for about a week when I noticed that he had a funny crusty thing growing above one of his eyes. Ii teated for mites and worms and when I got home today I got a cotton tip and rubbed some of the scaly mite oil over his head and OMG!!! SOME OF THE OLD SKIN WITH THE FEATHERS CAME OFF!!! There seems to be new skin underneath but it looks as though there is more skin that will eventually come off and his head will be completely bald!!! I have never had this happen before!!! Any clues as to what is wrong with him? Will his feathers grow back in time?
I have consulted all of my books and cant find anything definitive

Im hesitant to post pics as it is pretty awful looking. The bird is eating and drink and moving around ok. No signs of going light either. Any clues guys???