I've had a spotted mandarin in my 35g for about 6 months. He's doing OK but not the best. It's clear that he keeps on the thinner side but he's still plenty active. He does eat some of the frozen mysis that I put in there every day. His colors are still good and he's still active so I'm not concerned, especially because he eats frozen.
I had a normal mandarin when I first got into the hobby about a year ago... 4 months later he died. I listened to the LFS and they assured me he would eat frozen mysis. I tried live brine too, and even bought tiger copepods online, but it still wasn't enough. The last few weeks of his life he would barely move, and the "fans" on his sides barely kept him suspended.
I've seen it happen both ways... I just got lucky with my spotted mandarin, and I'm told that for some reason they are more likely to accept frozen food than normal mandarin's.
Personally, I would experiment with different foods, and I'm told that he'll only look for alternatives when he's depleted your tank of pods, which shouldn't take too long in a tank your size. If he keeps getting thinner and thinner, I would return him. It's better to take him back than let him die... take it from a guy who learned that the hard way.
I've recently been trying to figure out how to make a refugium of some kind for my 35g. I think it's possible, although kinda silly. Some people take a HOB filter and remove everything from the resevoirs, filling it with chaeto and pods and stuff... interesting idea for smaller applications.
') 
