Hello, I care for two savannah monitors and would like to share some information with you. Everything I've learned, I gathered through research (on the forums and other websites, books, scientific articles, etc.) and observation coupled with common sense.
Enclosure:
Size- How large is your custom enclosure? Give him space and he will use it. The notion that an enclosure is too large for an animal is somewhat silly. If you provide an environment that is useful to him, he will use it.
Substrate- Provide a nice, deep substrate layer consisting of moist dirt. You can play with the consistency by adding sand or peat until it is able to hold a burrow. The way I test this is by grabbing a handful and squeezing. If it holds its shape, good, but it should also break apart rather easily when touched. Pack it down lightly and you're good to go. Using this method, my savs have created multiple burrows throughout their enclosure.
You mentioned potting soil, was the bag marked potting soil? Make sure that whatever you're using does not have any additives. I believe, though I'm not entirely sure, that potting soil contains no actual dirt. It's a mix of organic materials and moss with added fertilizers and vermiculite. You don't want that. Instead, buy a bag of top soil, with no additives. Forty pound bags are usually under US$2.
Furniture- Young monitors are prey animals. As such, they will exhibit prey animal behavior, which is to hide. You want your enclosure to allow for that. Create hidden areas all throughout the enclosure. Add a layer of leaf litter that he can bury himself in. Add multiple pieces of cork bark so he can choose to hide in any part of the enclosure. I use leaf litter and cork bark because they are very lightweight and not likely to crush the lizard should something fall. Don't worry about your enclosure looking too "neat" with one hide here and one hide there. If you add lots of hiding areas and multiple basking areas your monitor will utilize every inch of his enclosure.
Temperatures/Humidity- If you haven't already, throw away your screen lid and use a solid cover for your tank. Or better yet, if possible, ditch the tank altogether. The purpose of the enclosure is to retain heat and humidity, which is difficult with a standard aquarium set up. You want the heating element within the tank. Before researching, I used a screen lid with a dome light on top. Now, with a plywood enclosure and my heat originating from within the tank, I can use lower wattages and I don't have to mist at all. My humidity comes from my substrate and water basin and ranges between 70% and 80% in different areas of the enclosure. My monitors shed normally, are active and appear healthy, so I haven't thought too much about the perfect humidity level.
I choose to offer multiple basking spots with as much variety in temperature as possible. These animals need to thermoregulate and are limited to the options we provide. So, for my guys, I have one basking spot that's 160F , one that is 150F , one that is 140F , and one that is 130F . They use all of them. There are also different temps all throughout the enclosure, under a cork piece, on top of that cork piece, inside a burrow, on top of a piece of secure driftwood... You get the picture.
The smaller the sav, the shorter the period of time it takes to heat up. So a higher temperature basking spot might not be necessary for now. Most people agree that 130F is sufficient for baby savs.
Answers:
"Is it normal for them to sleep most of the time?"
One thing I learned from my guys is that FOOD = HEAT = BEHAVIOR. Increase one, and the others will increase as well. In other words, the more you feed, the more they bask, the more they do. You should be feeding your guy daily. Remember though, your monitor wants to hide. Open space is mostly wasted space, especially at this age. Maybe the choices you have provided aren't adequate in terms of heat. Maybe you're not feeding him enough. Again, food and heat support behavior.
"He also spends hours soaking in his water dish."
How do you monitor your humidity levels? Do you house him with a screen lid? Soaking in his dish is normal, but if he does it for extended periods of time, he might not have enough humidity in his environment. Or he might be dehydrated.
"Another thing I have noticed is that he runs the side of his face a lot on rocks and the wood in his tank, could this be mites or is it normal behavior?"
Does he do this randomly or just while eating? My savs do this when they are eating because they need help positioning the food item in preparation for swallowing. Also if they get any of the juicy insect innards on their faces. Or dirt on their noses.
"He is eating well, he goes after crickets with flourish and he will eat rosey red minnows. But seems to avoid canned Monitor food which I bought him, and live wax worms."
I offer my guys a variety of whole food items. Canned monitor diet sounds like a waste of money. Try crickets, roach nymphs, worms, and pre-killed rodents along with a whole bunch of other appropriately sized whole prey items.
"Interaction seems good, he is responsive when awake and runs over to the side of the tank when I am near and will come over to my hand when I am in his tank changing water or fixing things in it. He also will go after crickets that I point to with my finger, so he is fairly intelligent."
On interacting with your guy, here's a post I wrote up a little bit ago. http://forums.kingsnake.com/view.php?id=1885537,1885580
I hope this post is thought-provoking and helpful. Best wishes to your and your monitor.