The next step

[Kabong]

Crushed coral isnt the best choice for a healthy sand bed.
You'd be better off getting rid of it and going with sand of some sort.
It will provide better filtration and more diviersity to you sand bed.

The sand sifting star isnt really suitable for a tank your size. ecspecialy since you dont have any sand to sift. Its pretty much a goner.
Not to tell ya what to do but id take it back to the LFS and see if i could get credit.

Filters generally produce nitrates, so they arent the best choice with corals.
Your protein skimmer does the same job and doesnt spike your nitrates.

Damnsels are genrally highly aggresive. May people regret ever putting them in the tank.

You clean up crew need some new recruits for sure. You should definatley get some snail's. Some more hermits too if you like them. (scarlet hermits are considered one the reef safest)

LOL sorry i feel like ive crapped all over your new hobby. Welcome to the hobby though, and good luck with your new tank.

[J Feez]

No thank's for your input there Tim. Everything you said I have been considering. I think I would really like to move to a sand substrate, but do you know of a good way to put it in there without clouding the water for a week?

[Kabong]

I dont think there's any easy way to swap out for sand, But its defintlay better to do it now rather then later.
The two ways that ive heard off are

1. Bomber bags:
Turn off your power heads,
pre wet some sand, place it in a sandwich bag place,
open the bag at the bottom of your tank and slowly pull the bag up until all the sand come's out.

2. Sand syphon. (works best when doing water change)
Take a gallon of water out off the tank into a bucket.
Add sand to the bucket and let it settle over nite.
Syphon the sand into the bottom of your tank.

Both ways are going to be messy and should be done in stages.
Most reef life can handle sand getting kicked around anyway. It happens every time there a storm.

[Kabong]

I run mechanical filtration on my nano and yeah i clean the sponge weekly.
But time frame whould all be relative to your bioload.

[J Feez]

So I guess the best thing to do would be to keep running the filter right now until I get all the LR and then get rid of it? Or could I get rid of the filter now?

I'm just uploading some pics right now