I think we should start with your water. You really need to test it for PH,ammonia, nitrite and nitrate.
Let me just add
Melafix is for bacteria,
Pimafix is for fungus.
Naladin from Aquatronics.
http://www.aquatronicsonline.com/product/product3.htm
All are pretty much the "safest" meds you can get.
Those are good for fungus
By your descriptions it does sound like a fungus as you said... frequent (as in daily) water changes of around 25% would be beneficial