Paats,
Are you sure you're feeding it enough? What are you feeding it? What kind of flow do you have. I recently collected some filter-feeding gorgonians and placed some in 3 different tanks. Two of the tanks are typical reef tanks which get a small feeding of cyclop-eeze once a day. The other tank is a tank of all filter-feeders and gets 3 to 4 heavy feeds a day (Cyclop-eeze, Artemia, and phytoplankton). In this tank, the gorgonians are thriving and growing. In the other two tanks they all died within the first week or two - losing tissue from the bottom, up. I don't know whether or not you should frag what's left of it, but whichever way you go, be sure to give them plenty of food and flow.
A good trick to getting plenty of food into gorgonians is this: Often when we feed them (during the day), the polyps are closed. You'll notice a little while after feeding, that the polyps are often open and extended - but often, by the time they're fully extended, the food has been filtered out or settled. I try to put a small amount of food in to get them open, then about a half hour later, add the bulk of the food.
Good luck,