That's hopefully good news on the eye, hopefully he will have some vision. The olive oil shouldn't hurt anything. I've used vaseline as well with no issues. If you are worried you could get some terramycin eye ointment and use that on the wound, some feed stores and tractor supply stores carry it. I've used plain neosporin in the eye on occasion with no issues as well. Mouth breathing could be from stuff getting in his nostrils or it could be stress as well. Maybe the ointment has a taste to it that he doesn't like as well. It looks to be healing well, so fingers crossed on the eye itself.