Dave,
Sorry to hear about that coral. It is a beauty!
What kind of current is it in? I know that hydnophoras prefer a little current pushing across them to stay happy. You also want to start the coral low in your tank. I dont know of ANY tank at Caye's that has ANY amount of light to speak of (on purpose by the way

). I would put the coral on the bottom of the tank or in some shade and see what happens.
Are you seeing any of the acontia (sp?)? This is the stringy white crap like what comes out the middle of a shroom when its upset. Hydnophoras do this also. Aside from the above mentioned things, I would probably do an iodine dip. If the recession gets going too bad, I would frag it. There's also the little superglue trick where you do an iodine dip then seal off the good tissue from the bad tissue with a bead of super glue gel.
Good Luck and keep us posted!
Dennis