Maybe this is just me, but I think it's mental.
Someone earlier mentioned that they felt like the coaches talked him up too much to pull him. I think it's important to remember, it wasn't just the coaches. The media also had nothing but good things to say. It also wasn't just the local media. This suggest to me, that Lee is killing it in practice, he also looked good in the Spring game. Not amazing, but certainly better than this.
So now he's in pressure situations and it just keeps going poorly. He's making bad reads, forcing things that he shouldn't etc. I've got to think there's something about game situations that rattles the kid. He clearly throws a good ball that seems to be a consensus. It doesn't matter how tight your spiral is though when you're making bad reads and forgetting to go through the steps. I think it's just going to keep compounding too.
IMPO, I'd be having him spend time with a sports psychologist on the sideline.