Captainhemo,
Yup seems like Velvet to me. Its a nasty parasite!
Definately leave the tank fowl (FISH FREE) for over 6 weeks.
I QT EVERYTHING now. I learned the hard way and lost to many cool fish due to diease. It seems like most fish in the large LFS have something.
Heartbreaking this hobby can be. But you know what, I admire you for being able to go on. I read alot of people quitting after a heartbreaking event where there whole tank was wiped out & all their favorite friends passed. As sad as this may sound, I cried my little eyes out when my first baby porcupine Puffer died (puff ditty). I loved that fish is character so much. It was heartbreaking to watch puffy take his last breath. I called my BF back then crying, he thought I lost my marbles. I was so sad and feeling helpless.
So I admire you going on.
Pm me if you would like me to send you any info. Reef central
http://www.reefcentral.com/ has a great forum on disease & cures.
Best of luck to you.
*hugs *
Lee