Very sorry for the late reply, been quite busy.
The main reason I asked about the anemone was the behavior is very closely related to that of an animal that has been stung by nematocysts of some type. Typically anemones will have the most potent effect on the animal but there are corals that can do the same. Although it is possible the wrasse has met it's "time", I would still look for other possibilities.
A little more background on the tank would help. At the top of this forum is a "sticky". Please post as much info from that post as possible.