Hey Tbone,
I will agree 100% with what unclejed is stating. Seems like Black Ich/Tang Disease, it is actually caused by a infestation of flatworms. These worms are parasitic in nature.
It is best to remove the fish from the display. Since the fish can not fight it off, I would put it in a quarantine setup for treatement ASAP. Before doing so I would give it a freshwater dip, to kill all external parasites, then place in the quarantine tank(QT). Most say to use Formalin in the QT to treat. FOLLOW DIRECTIONS PER INSTRUCTIONS!
Trying what unclejed suggests may work for you, it may not. You could also try overfeeding your Tang, soaking the food in vitamin enriched additives, hoping it can regain control of the infection. My guess is it will need some help, because we are dealing with a parasite. The sooner you do that, the better!
Good Luck!
If you need further suggestions, don't hesitate to ask....
Brad