I guess the only thing I worry about is that his current tank setup might be causing him stress. do you think I should keep his tank in this deconstructed state just in case he’s morphing? Or do you think he would be more comfortable if I return it to normal? I know I can’t do anything else for him at this point otherwise; just water changes and food until something changes.
The current set-up is fine
for the axolotl.
He doesn't necessarily need a higher water level.
However, it would be much easier
for you if there is more water in the tank. The more water in the tank, the more stable it is; the longer it takes to get dirty; it's easier to control and you'll have to do water changes less often.
If I were you I would raise the water level, just because it makes it easier to keep the water quality under control.
Just in case he is morphing you can just put something floating on the water surface, or have something sticking out of the water. You'll notice once he would try to get out.
Also wanted to say that I'm still not sure what the exact problem is. The gills and tail make a lot of sense with high nitrates - but the eyes still weird me out. Fixing the water quality (and waiting to see how it develops for a while) is a good first step, but I can't guarantee it will solve everything.
Also also: please don't be discouraged by the conflicting information. I don't think anyone here is really
disagreeing with each other; but none of us is absolutely sure, so you'll see a lot of different theories. That's only good, right? The more different perspectives you have the better you can form your own ideas!