My father's dementia suddenly worsened dramatically, can it be reversed?

My 78 year old father is diabetic and has been showing signs of dementia for a few years now. He shuffled about, had trouble with his short term memory and often repeated stories. But at the time, we suspected this was normal aging. I saw him in December and he was fine, a little frail but no worse cognitively. Then in January my mom found him struggling to get up by the bedside and took him to the hospital. They were told he had the flu and he was given a prescription for Tamiflu. I spoke with him on the phone and again, he sounded fine. Then, two weeks later he (unbeknownst to my mom) ventured out the front door to get the newspaper and slipped on some ice. He was confused when he came back in and didn't know what had happened to him. He was taken to the ER and given and MRI. His speech was bad and he was still confused. Then it cleared up and he was released. They determined that he didn't have a concussion. My mom assured me that he knew who everyone was, and was speaking clearly. I called him the next day and I couldn't understand what he was saying. I'd never heard him like that before.... he wasn't making any sense at all. I became alarmed and told my mom to take him to the hospital immediately. My mom told me that he was up all (the previous) night fidgeting with things and acting very agitated. He was in the hospital for a week - still very agitated and not speaking much at all. They gave him boxing gloves to that he wouldn't pull out his IV. A psychiatrist put him on a very low dose of Haldol to help clear his thoughts. Although we're not sure if that worked. They said their goal was to get him back to his baseline.

As for the tests, the doctors said they saw some brain bleeds and TIAs. They also determined that he has dementia (but didn't say Alzheimers) They weren't sure if he could get back to his baseline but apparently he'd improved so much that they released him and sent him to rehab to help him with physical and occupational therapy. My mom said he was talking about golf and carrying on convos that made sense. He was well enough to have visitors. It looked like he was getting back on track! Then on his second day at rehab he started to slip a little. He didn't eat as much and was looking tired. The next day he was the worst I'd ever seen him! He didn't recognize me at all. Or if he did, he didn't seem to care. He didn't want to talk, or to do anything that we asked him. He wouldn't eat, drink or take his medicine. He was preoccupied with grooves in the table. Then examined my mom's arm, acting like he didn't know what it was. Finally, after another grueling hour, he just laid down and went to sleep. My mom was so sad. I wanted answers from the staff. Did they do something to him? Were they not monitoring his sugar? They assured us that he was probably just tired because he was up all night the night before (?). Long story short, he was much better the next day. Though not as good as he'd been on other days. He was interacting with the other residents - none of who are in their right minds - and joking a bit. His speech was still affected and his thoughts were disjointed.

This has been very hard on all of us. I can only speak for myself when I say that the most upsetting part is that I don't know if we're doing all that we can. The Neurological Center of NJ is right down the street from his rehab center. Should we be working with neurologists and psychiatrists instead of physical therapists? His rehab center is full of poor souls who either hallucinate badly (screaming for attention), walk around like zombies or simply don't leave their rooms. Is this the best environment for my dad? Should he be some place that specializes in dementia? or would moving him be bad? Any advice would be so very appreciated.