Why not baffle with a sponge? That is what a lot of people do on this forum, and I am currently doing on a new tank setup. With a sponge I do not see any way he could possibly hurt himself, and then you don't have to do crazy amounts of water changes. The sponge is also great because, at least in my set up, the surface of the water is actually still. It looks like nothing is even on. Very peaceful. :)
In any event, I am very glad he is safe! Good luck with figuring out what you will do next. The discoloration sounds like it could be bruising (if bettas get that...), or maybe his color changed because of stress. If it was because of stress it might be permanent. I think people have Marbles that will arrive after shipping looking like a whole different fish!