I had to take it out this morning as I did not feel it was worth risking my system any longer. I have no idea of what happened to it but it appeared that something had been feeding on it. It still was stinging but there was another area on its base that appeared to be eaten away. I could stick my finger into it.

It was not rotting but it was clearly missing tissue. It looked damaged and not decomposing.
It was fantastic the night before was eating and I had no worries about it. What happened to it overnight is a mystery and no research prepared me for what I saw in the morning. My poor clownfish is homeless now, and I have no way of learning anything from this loss so far. I know this is a new system, however the rock is from a canreef member and is well matured, and my water params were perfect.
I hope someone might have some insight into this eventually.