There are some things that you need to change. from you pics i can tell that you need to change these things.
-cage, get rid of that glass one and get a large screen cage
-lights, toss out yours and get a reptisun 5.0
-substrate, throw it all away! obviously if your cham is eating it that is what is causing the problems, thats why cham cages dont use any substrate.
you should read the raising kitty website, and fill out the info below.
Cage Info:
Cage Type - Describe your cage construction (Glass, Screen, Combo?) What are the dimensions?
Lighting - What brand, model, and type of lighting are you using? What is your daily lighting schedule?
Temperature - What temp range have you created (cage floor to basking spot)? Lowest overnight temp? How do you measure these temps?
Humidity - What are your humidity levels? How are you creating and maintaining these levels? What do you use to measure humidity?
Plants - Are you using live plants? If so, what kind?
Location - Where is your cage located? Is it near any fans, air vents, or high traffic areas? At what height is the top of the cage relative to your room floor?
Chameleon Info:
Your Chameleon - The species, sex, and age of your chameleon. How long has it been in your care?
Handling - How often do you handle your chameleon?
Feeding - What are you feeding your cham? What amount? What is the schedule? How are you gut-loading your feeders?
Supplements - What brand and type of calcium and vitamin products are you dusting your feeders with and what is the schedule?
Watering - What kind of watering technique do you use? How often and how long to you mist? Do you see your chameleon drinking?
Fecal Description - Briefly note colors and consistency from recent droppings. Has this chameleon ever been tested for parasites?
History - Any previous information about your cham that might be useful to others when trying to help you.
Current Problem - The current problem that you are concerned about.