I do not believe that it is "hole in the head". I looks more like a bacterial infection. Hole in the head, in my past experiences, has been exemplified by much smaller "pin prick" type holes which grow to larger "divots".
I would use a gram-negative antibiotic. I usually do not like to use chemicals to dose fish, but rather a natural solution. I would probably try PimaFix first. Remember to remove all carbon filtration and dose according to bottle instructions. Keep us informed.