So you completely rewrote the Stealth rules.
Cool. (Though you should have mentioned that you have
extensive house rules at the beginning of the thread. There would have been fewer useless posts.)
Make the badguys use these new stealth rules. And use them on the squishy killers. Suddenly the fighter's ability to still be alive at the end of a fight means that he's the coolest guy in the party.
Other Advice
The fighter is doing 1d8+8, or 1d8+10 damage per hit, with a +16 to +18 attack bonus (call it +17). That's
expected for a fighter of his level. CR 8 monsters trend towards AC 20 with 11 HD (call it d8+2, or about 70 hp). Which means your fighter can hit, and it hurts, but it won't be fatal until round 3 (if all blows land) or 6 (if only primary attacks land).
On the reverse, he has an AC of 35 (29 when flat-footed) against a normal attack bonus of ~+13 at CR 8. So, he's only getting hit on natural 20's (or 16+ when flat-footed). Without his shield he's still got AC 30 (high for his level). I'd advise him to drop the shield for a two-handed fighting style - one that lets him trade his attack bonus for extra damage (-1 attack = +2 damage, up to -8 for +16). A +9 attack will land 50% of the time, and the 1d8+26 damage will hurt a lot more than what he's currently doing.
Alternately, giving a weapon modification that provides an extra +1d6, or even +2d6, of damage (Serrated, Spiked, Razor-Edged, or whatever you want to call it) would help his damage output without forcing a style change.
Perception Analysis
I think a big part of the problem is that the fighter is the
only PC in melee combat. Which means that he doesn't see how his flanking bonus made it possible for the rogue to sneak attack things to death (always a morale builder for me), nor does he see how quickly everyone else in the party drops when they get ganged-up on. All he sees is him taking all the beating and everyone else doing all the killing.
I've been there, and it is a very frustrating place. Because you only get to see how you suck and everyone else is awesome - you don't get to see how you are awesome.
When you include the fact that he has to spend turns getting to the fight (moving into melee), while
everyone else (enemies and allies) can begin the killing right away, you've got a recipe for the kind of player frustration you're seeing. All you can do is show him how awesome his character actually is.
I had a similar problem in an
Iron Heroes game. The Armiger player was really disappointed with his character (Emidius - 8th level Armiger) - and then he single-handedly stopped a TPK. The 15 tough mooks, plus hero-level boss, jumped the party and dropped every single other character. He was surrounded, 9 versus him, but he would not die.
Would. Not. Die.
After seven more rounds, he managed to kill every enemy on the field. He was mangled (had about 8 of his 83 hp), but his class features gave him durability, the kind of durability that let him survive that maelstrom of death and pain that put all the other (higher-damage) heroes on their butts. After that, Emidius was his favorite PC of all time - he could survive anything, even his super-flying-squid-druid (17th level) from a completely different campaign, and eventually kill whatever was trying to kill him. Sure, he wasn't as fast or flashy as the others, but he was
even more dangerous - which was all my player needed to know to really enjoy the character.
I really hope that some of that helps out. Best of luck.