Lots of feather loss is normal if the bird is molting, and it really is a shocking amount of feathers being replaced over a period of a couple of weeks.
I bathe the birds that I bring home for care in room-temperature water with boric acid (1 tsp per quart of water) in it to get rid of external parasites. I also set a pie pan on the floor with water and boric acid for them to bathe themselves in, some birds like to sit and bathe in the water and some don't. I recently read that Thyme (the herb) kills a certain type of mite as well, so that may be a nice addition to the bathwater. If you have any shredded tobacco, sprinkle it around the bird's nest or roosting area, it repels a variety of insects and works great on mites here.