sick gourami

What is the tank size and water parameters?

Dwarf Gouramis are prone to disease due to inbreeding and poor breeding conditions, as they are being mass produced so the quality is very low.
If you must buy a dwarf gourami try to get home bred ones or ones that arent from singapore farms.

Does it look like fungus...are the scales missing with white stuff on it? Or is it more an open, inflamed wound? Is he in a tank with any other fish that could be considered aggressive enough to have cause him damage?

If it is a fungal infection he should be quarantined and treated with medication. By quarantining the fish you can monitor him more effectively and make sure your other fish aren't affected. Remember when you use the fungal medication to take out the charcoal in your filter media if you have any, otherwise it will just filter out the medication. He could also be suffering from a secondary infection caused by damage from something in your tank, be it fish or decor. Again, an anti-fungal should help.

You have a reading of Nitrites 0.3 ppm...this is not good. Any Nitrites in any amount mean poor water quality. This would be my guess as the cause of the fungus infection, especially if it has come back after going away once. How often do you preform water changes? You should be doing weekly 30% water changes with a gravel vac. What is your current Ammonia reading? Ammonia and Nitrite should always be 0, anything else means you need to do a water change asap.

I agree with the above, as well.... Water changes, water changes, water changes, get those nitrites down to zero

:iagree:
the nitrites are something to concerned about.
are you showing any ammonia?
you may want to consider qt and or daily water changes. nitrites at this level over a prolonged period could be hazardous for the fish. it definitly will affect the heal time