[cypher]

My first thought is that you could do with a lot more substrate in the cage, ideally 15-20cm deep, that allows your ham to dig & burrow naturally & even those hams that don't burrow a lot seem to feel happier & safer with plenty of substrate, it also makes cleaning easier as you won't have to remove so much of the substrate when you spot clean or do partial cleans so that again will make your ham feel safer & happier.
There is quite a lot of open space still so I would try to provide more enrichment, home made toys are fine you don't really need to buy stuff, an egg box with a couple of holes cut into the ends makes a great toy, you can hide food or treats in there, more in the way of small cardboard boxes or tubes, toilet roll treat toys, that kind of thing will easily fill a cage up more.
Does he have a sand bath in there? I couldn't be sure from the photos. A sand bath (with chinchilla sand not dust) is great for them, keeps there coat & skin in good condition & they just love to spend time in there!
The cage doesn't look that big so I think a few simple adjustments could help a lot.
Have there been any other changes in his environment? It does sound as though he was happy to begin with but not so much now if I understood you correctly so I wonder if something else may be making him less confident. A change in room, any other animals, things like that?
Some hams can be a bit territorial about the cage & don't like hands in the cage very much, if he doesn't bite outside the cage then I would keep interaction for those times, you could try just giving treats from your fingertips when he's in the cage so he can't bite but do any other handling or hand feeding during out of cage time.