Teething is a troubling time for them, and sometimes it just takes them awhile to become comfortable again. Our dogs in the past have experienced the exact same thing. Don't worry, he'll be fine and come around soon enough.
As far as the food thing, I don't think I would switch to soft food completely. I might just mix in a little soft with the normal dry that you give him. You obviously still want him to eat, but the dry might be a little tough for him because his little mouth is aching. Switching over totally to soft food might make his little tummy upset, and your right, will probably give him diarrhea.
Hope that helps! Good luck!
