The faded color will be from lack of proper foods or just simpley adjusting to the new surroundings. They will often lighten in color when freightened or at night.
For feedings I would suggest getting some nori and placing it in a clip for it to graze on throughout the day. It will allow it to get a decent amount of nutrition and will not need to compete as much when it's general mayhem from feeding the other fish. Tangs are herbavores and do not require meat.
Keep tabs on the other fish (damsels primarily) for aggressive behavour that could also add to the tangs stress. A 36" long tank is not really a sufficient amount of space for a tang either..