First, move your ill Oranda to a hospital tank. Then check your water chemistry. Can you give us a picture? It doesnt sound like fungus... Try putting him in a mild salt water bath and maybe some melafix. are there any other symptoms? perhaps little bugs or red sores on the rest of the body?

It's probably mouth rot. Dark, reddish lips and lethargy are the symptoms, right?
So, mouth rot is usually caused by parasites, so look for them first. It can also be caused bacterially in a crowded tank, or when a fish is rubbing his mouth against the tank sides or decor. The lips turn out to be dark reddish (almost like lipstick) but they should soon start separating from the fish as tissue starts coming off. In other words, the lips will fall off if you won't take action.
First step is to test all the water parameters, like pH, nitrite, nitrates and ammonia, as these may cause the fish to feel uncomfortable in the water, making him rub himself against objects in the tank.
I would also like to know how big your tank is, to be sure that it's not crowded. If it is, you should definitely separate the fish from there into a calm hospital tank with a plastic plant and some hiding place (like a big, clean flower pot).
Secondly, you should start treating quite aggressively, to make sure that you eliminate parasites in case they are present. Start treating with salt and antibiotics at once! And try keeping the water quality perfect until the mouth heals!

Don't put him back into the original tank until you're certain that he's active, and healed (: