My first instinct before reading the posts was YES he needs to be kenneled! Sorry but it's not a bad thing! It's just helping him to sort of re-orient himself. Like jan said, in her cellar, there are several litter boxes, and where he lived in his kennel on the first floor, he knew exactly where his box was. That was his only world. Maybe the change in location of things has just thrown off his world! It's only temporary! How are Gracie's eyes!?