I'm new to loaches. I've got two three inch guys in a 20 gallon quarantine tank. They've been in there about a month. Just the two of them. I normally QT all my fish for thirty days.
The problem is one of them has developed a white bkuster under an eye today. It looks milky white and not fuzzy. They are kind of spazzy so I assume he injured himself on a tank ornament. I think he looks paler and breathing faster than the other one.

Any ideas what it is?
I have medigold antibacterial food, a variety of antibacterial meds(maracyn I, II, Plus). If it is more than just an injury that is. I also have a stocked medicine cabinet just in case (quickcure, prazi etc).
Tank summary: (before water change - just did 50%)
20 gallon
70F
1/4" layer of gravel from main tank
Aquaclear 30.
PH 7.0
Ammonia 1.5
Nitrite .10
Nitrate 8
GH3
KH3
I use Prime to dechlorinate and detox ammonia.
It was instantly cycled with media from my main tank that they will be going into. I keep getting cycle blips and keep putting in more cycled media in the filter. I'm doing lots of water changes (25%-40%) per day. It was great for two weeks and then started showing ammonia and nitrites the day before yesterday. (I am using city water from my moms in the QT tank- my well water has a PH of 8.2 which would make ammonia toxic quickly).
I've been feeding mazuri gel food until I get a blip when they are fed skinned peas.
I really love these guys.
You guys are the loach experts. What do you think is wrong and if treatment is recommended - what would it be?
Thanks.
Karrie