It sounds very much as if your fathers PEG tube site had broken down and formed what is called a fistula.This causes huge problems for a few different reasons,not least of which will be your dads poor general physical condition.The conastant leakage from around the site will keep the margins moist and make healing a very long drawn out process.
It is perfectly normal to have to pack a fistula as they are supposed to heal from the inside out wards,but the conditions reqired to aid that healing are good clean tissue formation and a clean wound site.Both of which i doubt your dad has.

If your dad has finished his treatment is there any chance of him taking any nutrition by mouth yet?because the sooner he can get the tube out i think the better he will be.

What a terrible situation for you all.

good luck liz