This sounds similar to what happened to my nanday Scout. I didnt realize that a side door in my caique's cage was not secured. I NEVER use this door but being a caique, he found it and opened it. I came home from work to frantic screams from Scout.
On top of Scout's cage was Zeek, my caique. Zeek had swollen nares. Scout seemed to be holding up her foot. (In Zeek's defense, I believe he went to Scout's cage as a friend, but she does NOT like him). I examined her closely. THe first pic below is what I found on Scout's foot but there was little blood. I decided to watch the birds and to take them to the vet the next day if they worsened. Both birds seemed fine the next two days. Then, on a SUnday night (it is always a sunday night when these things happen!), I had Scout with me in the living room. I set her on a chair and took the trash out. I came back to blood everywhere!!! She had chewed her nail completely off!!! See second pic. I thought she was going to bleed to death. SHe would not stop chewing on it, intermittently singing and dancing as if nothing was wrong, while bleeding profusely. I tried cornstarch, but she would chew it off. I found an on call vet, but the bleeding had stopped by the time he Calle dback and he advised to wait until AM. Around midnight it started again. The vet did not return my calls this time. At this point, I put her to bed, hoping pressure from her happy hut would stop the bleeding. I didnt know if she would make it to morning. The next AM I took her into the vet immediately. They had to amputate part of her toe. She was in a cone for a couple weeks.
I might think about getting your little guy a cone to stop him from chewing on the foot. I would hate for you to go through what I did with Scout. It was awful.
Scout!
Woah!! That's crazy and scary. Poor Itsy!! I've never heard of that before. How has she adapted? I'd imagine pretty well thou as birds usually do. 
Did your vet give you any reason? I dunno parrots can just be so weird sometimes 
How's Binky today?
