Hole in the head disease is definately caused by bad water quality. A 20 gallon tank?? That is torture to an Oscar that big. I can't believe that the poor thing is even alive. Hole-in-head disease is not contagious. The relationship between Heximita and hole in the head disease is reasonably well-established. The lessions are caused by Heximita parasites that have migrated into the head where they cause the surrounding tissue to decay. Because of the damage to the epidermis, secondary infections easily set in, making things worse. It is not certain that all cases of head and lateral line erosion disease in fish are caused by Heximita parasites. Malnutrition in particular has been proposed as a possible cause of the disease. Because many fish likely carry low-level Heximita infections, anyway, the disease isn’t normally considered to be contagious.
It is very important to keep up consistant water changes. The minimum recommended water change in Oscars is 50% once a week, but I find this lacking. I think there should be a 50% water change every 2 to 3 days. I will nver understand people who insist that Oscars can be kept in a 20 gallon tank, and probably with minimal water changes.
I hope you get this poor Oscar. He seems like he just needs a good home to get better.