Carnation corals, ie. Dendronepthya, Scleronephthya, other nephthyas, are notoriously difficult to keep. Even Eric Borneman states he has only kept them alive for a maximum of four months (although he is familiar with a number of aquarists who have had better success).
It is unfortunate that LFSs continue to offer these to the public, without due warning. I'm no expert but I feel that these are almost the most difficult animals imported into this country for the hobby.
The problem seems to have two major dimensions: the corals feed on a specific size of meaty particulate matter (and not phytoplankton as is sometimes thought; remember as non-photosynthesizing, these animals are primarily carnivorous), and the food must pass through the feeding appendages (mouth, tentacle, what-have-you) at a specific velocity. I have seen (but cannot relocate the website) a species tank set up at a public aquarium or institution that was circular and had rather complex current systems set up. This was apparently leading to a moderate amount of success with the corals.
Here's a fantastic discussion on the topic:
http://reefcentral.com/forums/showth...=Dendronepthya