Has your vet done a skin scraping to check for mites?
What brands of food have you tried?
Your other cat wouldn't necessarily have a problem, depending on which type of mite it is. There are two, one is contagious, the other isn't. It isn't super likely, but would be worth ruling out in my opinion. Bacterial infection and fungal infection should be ruled out as well.
Natural Balance is a great food, but you might want to consider trying California Natural. It is a similar quality, but has a very limited ingredient list specifically intended for pets with allergy problems. It comes in two dry varieties (chicken or herring based) and many canned. I would recommend trying something that is a different protein than what he has been eating. Here is a link to their website:
If food is going to help it may take up to 6 weeks before you can tell.
If there are no underlying problems this may be a condition called psychogenic alopecia. Basically it is a behavior disorder where the cat overgrooms to the point of hurting itself. It is diagnosed by ruling everything else out. Sometimes anti-anxiety medications help, there are others than you could try besides amitryptyline. Here is a page about this condition:
We often use corticosteroids at the clinic where I work for skin conditions that have no apparent cause, and have good results with that. When used short term, there is not the big risk of side effects as there is with long term use.
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I'm a strong believer that canned foods are much better for cats, especially one that doesn't drink much water. Dry food is not going to help keep his teeth clean, that is just a story that unfortunately a lot of people believe. Here is a link to a page (written by a vet) that has a lot of information about why canned is better:
You could try offering him cat grass to chew on. It may give him something to do, and keep his mind off of chewing on his back. Most larger pet stores sell this.