The second picture doesn't really look diseased to me... it just looks not very happy. I imagine dropping it a couple times didn't really make it too happy.
Personally, I'd just let it be and not mess with it for a while. Constantly moving it around or dipping it is just going to stress it out more. I sure wouldn't trash it... that's for sure. I'm no expert... but I just don't see anything diseased. I just see a really really retracted polyp. If it doesn't perk up after a couple weeks, then maybe I'd think about doing something about it.
Saw your other post on MsBeanCtr's thread... I just lucked out with my acan colony. Right place, right flow I guess. I've got mine mid tank in a 46g under about 200W of PC
fluorescents - low to medium flow. I squirt some mysis and cyclopeeze on it maybe once a week. The greens in mine aren't as green as when I got it, and it was kept under metal halides previously - not sure of the depth though. (It was a LiveAquaria purchase.)
Hope yours pulls though... they really are a pretty little coral.