Help with QT, Coral Beauty with cloudy swollen eye

[Carmen]

PLEASE, Help the newbie again!!!
My most recent purchase a Coral Beauty is not doing so well.
I have put him in a QT tank but am not able to keep the params stable!!! URGH! The tank is a 10G with a HOB filter with carbon and some ammonia rock things in it, a powerhead, heater and about 8lbs LR. It was stable all params good before adding the fish. Now I have Ammonia 0.25, Nitrite trace not quite registering, Nitrate about 10-15. I have been doing 10-20% Water changes every other day. (Am now increasing to daily) Will do a 30% WC tomorrow.
Now my fish is losing color, cloudy swollen eye, and whitish fringe on fin. I know it is likely water quality issues but I cannot stabilize it?? Also he is not eating well - picks abit but does not show any real enthusiasm.
HELP, what should I do??
I am frustrated because I thought I was doing it "right" by QTing and it seems like in the end it may be doing more harm to this poor fish than good! I am tempted to just put him in the display because atleast I know the paramaters are perfect there and stable!!!!!
He is so pretty and I don't want to lose him. I feel so bad keeping him in less than ideal environment but I can't FIX it??!!!
What should I do?
Carmen