Brent - Shrinking gills are usually caused by poor water conditions and/or illness.
If you do not have a test kit, get one that will let you test for ammonia, nitrite, nitrate and ph.
If you can not afford a test kit take a sample of your water to a pet store and ask them to test it for you for ammonia, nitrite, nitrate and ph.
Ammonia and nitrite should be zero, nitrate should be low and ph should not be less than 6.5
I believe I read in another thread that you just moved? If you just set up that tank with new water it is cycling and your water could be toxic for your axolotl.
Read this article
http://www.caudata.org/cc/articles/cyclingEDK.shtml
and get your water tested ASAP
If you water shows you have ammonia and nitrite you should remove your axolotl from the tank and put it in a smaller food safe container that you can easily change the water in daily. Let your tank finish cycling before putting your axolotl back in the tank, that could take as long as 30 days.