Ok. More questions
LOL
You say the levels are "good" but you don't say what they are; can you do some quick testing and get us some numbers? How long has the tank been cycled (and what else is living in there besides the other gourami)?
I'm guessing here, but I *think* your guy came from the
lfs sick. Is why we stress quarantining fish for a coupla weeks before putting them into a main tank. It sucks to have one new fish get all your older fish sick (and a pain to have to treat them all!).
Again, this is a guess, but it sounds like dropsy to me. Dropsy is a condition where the kidneys start to fail and the fish retains water...and they get all bloated. Thing is dropsy isn't a disease in and of itself, but a symptom of other things, such as bacterial infections, poor water quality and poor nutrition. In your case, I doubt its poor nutrition. Without numbers its hard to say if its poor water quality. My guess is its related to an infection he got at the store and brought with him.
I'm HOPING its a water quality problem; thats easy to fix with water changes. An unknown infection is much harder to deal with, and usually, if they've had the infection long enough for dropsy to show up, antibiotics don't help much (the infection is usually too far gone). Kanamycin is the recommended treatment for dropsy, but there are no guarantees as I'm sure you are aware. There is a write up with pics here:
http://www.fishpalace.org/Disease.html . Just scroll down to dropsy.