In the meantime, here are a couple of tips:
Birdy has been abused. He doesn't trust humans. Give him a treats and let him settle in.
If you must cage him, then keep the door of the cage open.
It's very important to change his water and keep his food bowls clean. The act of providing him with fresh food and water consistently will show him you're taking care of him.
Move slowly when around him. No sudden hand movements! Always approach the birdy from front or top if you must handle him. Slow, fluid movements. Always talk to him in a kind voice when approaching him and working around him.
What's his diet like? If it's just seed, change it and start giving him veggies, fruits, and nuts. As his diet changes for the better, so will his demeanor.
Put him by a window so he can see outside.
Here's a post from my blog:
How to get a bird to trust you
Read it; live it.
Sounds like birdy is going to be a tough case. It's going to take a few months before he starts to come around, although, it can happen in as short as a few days IF you interact with him regularly. Interaction doesn't mean forcing him out of his cage and onto your arm. Just let him see that you're trying to do good by him. Show him kindness.
If you have the room and are willing to try it, cageless rehabilitation is a great way to go and it cuts down on the biting significantly.
Don't towel him at all! It's a surefire way to make him feel threatened.
Has he gone to the vet for a full checkup yet? If not, he needs to. Birds are notorious for hiding illness and as we all know, sick animals are nippy / bitey / dangerous / overly-aggressive.
Try to give him calm stimulation. No TV if you can help it around him. Serenity works.. make a serene environment around him.. Let him grow accustomed to seeing you interact with him. Have your wife do the same with the treats.
Get yourself a "perch stick" for handling him, but if he shows fear or aggression towards the stick, keep it away from him until there's a basic level of trust.
Establishing trust is the hardest part of owning a bird. Once you have it, the rest is easy in comparison.