OK you've got to take control here.
-find out what food you are using. If it isn't a true avian food, change the formula right away.
It could be a number of things, malnutrition (as prev. mentioned), underlying illness or the parents were picking at the chicks feathers. The malnutrition could stem from the parents not being on a healthy diet, therefore not passing on enough nutrients to the chicks.
It´s worth investing in a good quality formula for the baby, being sure to feet it at the right temp, keep the baby warm in a brooder.
The other bird, who has red suffusion, was given to you at 2 weeks? Why? Could you let your breeder friend know that lovebird babiies should stay with the parents until at least 3 weeks, unless there is a problem? Or maybe invite Fiona's previous owner to the forum so she can learn about dummy eggs etc. Birds that have bred 5 times this year -- that is way too much. The hen is now a chronic layer, and this is really REALLY Draining her health.
And of course, a v
vet visit should not be delayed. Especially to see what is going on with the eye but also to check for any illnesses.