Tentacles disappearing is generally a sign of starvation. So, what you said is essentially correct. The anemone is eating itself in a manner of speaking. It will slowly consume its own body mass until it eventually dies. I had one do this very thing, and I'm afraid it didn't make it (though I had knew even less about anemones then than I do now). I think your best bet is to do whatever you can to feed him. If he has no tentacles, that's going to be tough. Gently hold small bits of food on his mouth and hopefully he'll grab it. It'll probably take awhile (and it may not work at all), so be patient. Don't shove the food in its mouth by the way, you'll probably damage it. Lastly, keep a close eye on it, and if it starts to decompose, get it out of the tank quickly! An anemone can poison your tank fast, and it's unfortunately the line between alive and dead is generally pretty blurry. I'm afraid I'm nowhere near knowlegeable enough to know why your anemone has started to do this, but hopefully he's not past saving.
Best of luck!