I did some searching and this is what I found...
"Head and Lateral Line Erosion (hole-in-head disease)
This disease can affect discus, other cichlids, and many saltwater fish. The fish develops holes in it's head and sometimes along its lateral line. Causes are unclear but as in any disease, stress and poor water quality likely play a role. The Manual of Fish Health states that HLLE is probably due to nutritional deficiency, especially of vitamin C. Fish in planted tanks rarely get HLLE, which supports the nutrition idea, since fish can nibble on the plants and obtain extra nutrition. Untergasser also observes that the protozoan Hexamita can be found in the lesions. Untreated cases can eventually prove disfiguring or fatal.
Remedy: First, make sure water quality is optimal and reduce stress. Stopping carbon filtration may help as it can remove nutrients from the water. Then feed a vitamin-enriched food, paying particular attention to vitamin C supplementation.
For stubborn cases, some books suggest metronidazole (Flagyl) to eliminate Hexamita (a mildly pathogenic protozoan) from the lesions. Your mileage may vary with that one. Metrozole and Hex-a-mit are commercial medications with metronidazole."
Quote from
http://fins.actwin.com/mirror/disease-fw.html