I disagree with this. He only lost one set that tournament which was his first match against Fratengelo. He beat Tsonga in two sets 7-6 7-6, who played at a really high level and served lights out, beat Nadal in two sets and just destroyed Raonic in the final in a clinic in returning and shot making from start to finish. So no IW did not signal that his form was dropping and if anything showed that his form was still at a very high level. Even in Miami, he did not even lose a set and destroyed Nishikori in the final so clearly there was nothing wrong with his game at the time. After this we did see a few chinks in the armor with his loss to Vesely at Monte Carlo, but that could be contributed to fatigue more than anything. He did lose to Murray in Rome but again he had played much longer and tougher matches against Nishikori and Nadal whereas Murray cruised through in a cushy draw so he was a bit fatigued. Fast forward to RG, and he played amazing tennis in the last 3 matches to win the title. So his form really only dropped significantly after RG as far as I'm concerned.
Loss of form doesn't normally happen overnight. Consistency is the first thing to go. I think you may be rushing to your man's defence, but really I am not criticising him, just stating the progression of his troubles as I have certainly seen it happen on court. Djokovic began to put up mediocre performances more often than in the entire 2015, where he had few relatively weak matches besides struggling through Canada-Cincy. I don't see how you can ignore dropping a 2-6 set to a qualifier, or double faulting 10-odd times against Thiem. And then he'd play a strong match when required, such as the IW semi and final. It's also no coincidence Nadal began to threaten him again and famously had set points in 3 of the 4 sets they played in that period, even if Djokovic still managed to win in straights both times.
For instance, Miami is actually a good example of unnecessary struggling against everyone but Edmund and Berdych. Yes, Djok still won in straights - first, because he was clutch, and second, because, let's be honest, the folks he played didn't happen to show anything special, and the final was quite an UE fest. I'm not intending to disparage the victory - Djokovic won many Miamis against strong competitors and is rightfully the king of that tournament - but it's a necessary observation when assessing and discussing the level of play.
Rome is another example - it's true Murray had a soft draw and Djokovic had a tough one, but peak Djokovic would have run through it anyway (Nadal still not leagues better than his 2015 version). Instead, he struggled from the first match and was then easily beaten in the final.
But then, indeed, Djokovic from the last three rounds of RG appeared to rediscover peak level (bar the first set of the final, which can be attributed to nerves), so his subsequent regression to spiralling down was highly surprising nonetheless. I thought he'd at least go Fed 07 - beatable in masters, but keeping a high and clutch level in the majors (and YEC).
In the end, of course it's not a final argument without properly sitting down to analyse the footage, but, with the expection of Madrid where he was great from start to finish, Djokovic clearly looked shaky to me at the time, relative to his peak self. He was still able to up the ante for the big matches when necessary, but it couldn't last forever with those slow starts. Either the slow starts would go, or the level-upping ability. So it ended up being the latter.
