The "spikes" you saw may have actually been some type of parasites. Instead of using Melafix (which really isn't going to help a serious problem like this) you could try a specialised treatment for hole in the head - Waterlife do one called Octozin (and make sure you don't have any carbon sponge in your filter). Octozin will kill any internal parasites immediately but with the fish in that terrible state it may take several weeks to heal up. Extra water changes will help in the healing process, as will a good quality diet.
The protruding eye looks like pop eye which is usually caused by stress...and obviously this fish is under a lot of stress at the moment. HITH is thought to be caused by stress that weakens the immune system, too - e.g. from parasites, poor diet, bad water quality/tank environment etc
I've also read that increasing the tank temp by a couple of degrees helps to speed up the metabolism of the fish and thus the healing process. Remember to adjust it back down after treatment, though.
Once you've treated for the HITH disease, give it a week of just doing partial water changes and if that eye doesn't begin to improve you could treat with Myxazin as that's usually very good at getting rid of pop eye.
Poor thing, let's hope he survives it...
Regards, Athena