There is no way it is from the palys. I have had them in my tank for years. Massive numbers in a 50g tank. I have cut and crushed tons of the pale green / brown palys right inside of the tank because I do not like them, and they never poison the tank. I think you may have caused an ammonia spike from added a large piece of rock. I honestly do not think it is from the palys but if you want to be safe just run a bunch of carbon.
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