I'm guessing that the small tank had him stressed, which lead to the lying down behavior. Emerald crab probably caught him, since he was down low, and had an expensive dinner.
There are very few fish that will work in a 16g tank. I would hold off on getting anything else until you upgrade to the larger tank you spoke of. If its the 70something gallon you mentioned earlier, that is still about half what a blue tang would need.
Saying you research and then not listening to what you read will lead to problems. I would be suspect to any LFS
that told you that it was okay to put a blue tang and clown in a 16g. Even the Blenny should have a 30g. Horrible advice, but they got some money. They profited and you lost a fish and money.