For how long are you keeping this lion?
I would increase salinity, at least to SG 1.024 (I'm keeping it at 1.026). Even immediate rise is better than the low salinity, in my opinion. Is tempetarure in limits 78-80F?
Also, if you can, check on bacterial and viral diseases diagnostic and treatment, for saltwater fish. I never has this problem with my volitan or antennata lions, but have an impression that it loses tissue while being alive.
Rosy reds could transmit diseases, if were added to the tank without 3-4 weeks of quarantine.
I know, I know, very few of us have possibility to keep feeders fish in quarantine, plus the main feeders tank...
Ghost shrimp, being crustacean, is more safe, and much more of them can be kept in the tank, comparing to the rosy reds. I'm feeding them exclusively seafood (grocery shrimp and fish), this way lion can be indirectly fed by a seafood.
Ghost shrimp is much more expensive, but some Big Al's stores sell it in bulk for a lesser price.
As I understand, you are feeding damsels too, now and then, right? By accident, I discovered that a couple of the small chromises helped to restore health of my starved in LFS antennata lion very fast.
When the lion will be better, try to feed it pieces of shrimp (raw, unsalted, not freshwater) and the ocean fish.
Also, I would buy alkalinity test kit, at least Aquarium Pharmaceuticals KH for saltwater, pretty good and cheap, Salifert is better. Try to keep alkalinity in the limits 8.5-11.5.
If salt mix that you are using has high alkalinity, change the brand, or mix 1:1 with other salt mix, with lower alkalinity.
If you have in the fridge a bottle of cycling bacteria (like Seachem Stability or any other), you may try to add them into the tank - may be they can help to restore bacterial balance in the water - you know, like probiotics for humans.
Just a thought.
My sympathies to your lion, hope it will feel better.