Can demyelinating neuropathy be caused from residual nerve damage even if the nerves are no longer being pinched?

Yes it can: deafferentation pain. Deafferentation refers to the partial or total loss of a sensory nerve supply to a particular body area. Normally, when the sensory supply to an area is compromised, one would expect a decrease in sensation and a loss in ability to perceive pain. However, in some cases involving nerve injury, a paradoxical condition arises. See pain management specialist.