The yellow "things" are probably seed... and you are just seeing a part of the crop that extends to the back of the neck. At least, if I am remembering how the crop is correctly.
Not the best of pics, but a young parrot and you can see how the crop somewhat goes around the neck.
Caique Hatchling | Flickr - Photo Sharing!
And, although not a parrot, a great example of the crop in a chick.
siskin chick, full crop | Flickr - Photo Sharing!
It's possible for one bird to be sick in a flock and not infect the others. It really depends on their immune systems.
He shouldn't be eating more than 50% pellets. What about feeding a base diet of 25-50% pellets with the rest made up of sprouted seeds? Then whatever fresh/cooked foods you can get him to eat? (grains? legumes? vegetables? some fruits? occasional cooked eggs?)
Provide a lot of opportunities for foraging, destroying toys and allow him (her?) to have full flight. And, as you mentioned, some time outside (in a cage). 30-60 minutes per day partially in the sun! If you can, get him to bathe at least 3-4 times per week, if not more frequently. Wet birds typically don't pluck!
Although the tests are expensive, and they don't always tell you whats wrong, it's a start! What if something was wrong, and you chose not to do the tests, and because of it, your bird only got worse? It's better to get the tests done and know that everything is fine than not get the tests done and there's something wrong. At minimum, a fecal test! That alone is typically within the $20-$60 range and can tell you if there are any infections within the intestinal tract.
So please, if you can, get some money together for him and get him tested! I know how rough it can be, been there and done that myself! If it's simply not an option, then I'd recommend adding milk thistle extract (alcohol free) to his diet every day. One or two drops per day if he consumes it! It's a good liver support and may help to fight off infections. Before doing this, I would also recommend asking the vet his/her opinion.
I'm recommending the milk thistle as I had one hen get sick and I simply couldn't to take her to the vet (money being the issue). I was also out of any kind of medications, but I had some milk thistle on hand. I gave it to her every day for at least a couple weeks, straight into her mouth, and she went from being pretty sick (easy to remove from cage, - listless, dull eyes, ruffled feathers, wings hanging) to feeling just fine! (hard to remove from the cage! picture perfect of a healthy bird!) She's an older hen, past her expected life expectancy, has cancer and is known for getting bacterial infections lately. Her immune system must not be what it used to be in her younger days! Told my a-vet about the milk thistle, and she was surprised! Guess she never thought of using milk thistle as a form of treatment for a bacterial infection!
I can't say that the milk thistle *will* help, but in small doses, it wont do any harm, and it will help to support the liver.
Easier options, if your bird is sick (and I don't know if he is or not - he would have to be seen by a competent vet), here's a couple of other options. (supplements, not cures - i.e. may help)
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