I agree the first thing to determine is whether or not somebody or something in the house is traumatizing the bird. Also, check into breeding cycles for the bird- hormones make birds do crazy things. They also go through phases as they grow up- the equivalent of the 'terrible twos'. Or, it may just have developed a territoriality around its cage since it settled in- many birds are nasty or antisocial until you get them out of the cage and then they're okay.
You might start a training/conditioning program to re-tame the bird. There are a number of good books out there- I'm currently working on clicker-training a couple of birds and it's pretty interesting. (Clicker-training is just reward-based training using the clicker to mark the exact desired behaviour- it's pretty powerful and is used in varous forms by dolphin, dog, elephant trainers etc.)
Anyway, training a bird just involves finding its absolute favorite treat, and using that treat exclusively to reward good behaviour; in your case, coming closer, stepping up without biting, etc. It takes patience and consistency but a lot of bad behaviour can be eliminated by just giving the bird time and attention and rewarding desirable behaviour.
Good luck!
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