Hi,
I don't think I would worry too much about not eating pellets....but you do have the signs of a potential problem. When you have a GI slowdown, thinks can go downhill quickly. Our first response is always hydration as the gut has to be properly hydrated in order to move things thru at the correct speed...called GI transit time. I suggest pushing hydration. If you have the capability of administering sub-q fluids.....do so. If not, wet leafy greens such as romaine lettuce is an excellent choice....but like all other things, don't overdo it with too much lettuce. Make sure your rabbit has hay avalable all the time. Since there is fur in the poops and he is eating newspaper, that is usually an indication of a diet that is too low in fiber. Keep him moving around as much as possible....movement will sometimes stimulate the gut to get moving. Papaya, and pineapple, is a somewhat controversial treatment. It is believed by some, including me, that the chemical makeup of papaya extract or fresh pineapple does aid in breaking up the mucus that binds ingesta in the GI tract. Lab tests have so far been inconclusive but we have had success with it.
Stasis is always a symptom of something else. I would keep your rabbit brushed as often as possible to limit the amount of ingested fur. Make sure you offer hay free choice at all times. Maintain hydration and supplement if needed. If you choose to use papaya, use the extract....many pharmacies or health food stores carry this as a human digestion supplement. If you use pineapple.....it has to come from a fresh fruit....no canned, bottle or processed pineapple. I hand squeeze the juice and feed it by syringe....most rabbits seem to like fresh pineapple. Keep him moving. Monitor his body temp as they sometimes become a little shocky and their body temps drops....and further diminishes GI action. Offer him supplemental heat if necessary. If you are offering commercially made (sugar laden) treats....toss them.
Randy