[Tangster]

The sponge you removed should have been left in place what you did I think was the wrong move in trying to combat NO3's Rinsing that sponge weekly was fine and the F/W harmed nothing really that sponge was catching particles that now have started to settle out in your C.C substrate.. The sponge was the worst thing you could have done.
I could give less then a rats but what many have told you about removing and rinsing that sponge. First with the limited space you had dedicated to the tank and lack of a sump with a good strong skimmer running 24/7 and using a HOB filter only the NO'3s will always be little of a problem But at the levels you where having was not a real big deal. You have reached full capacity with the bio load on the 55 gallon system.

Also you need to run a good carbon again I could care less of others opinions about carbon us I have reef's I'd compare to anyones and I run carbon 24/7 and change it every 5 or 6 weeks use less and more often that way you will not strip the water to fast. Also a simple coil denitrater will solve the NO3 issue but with out a sump then you would need a HOB box type they need to be fed every so often.. Not big dead a few drops of Vodka or Gin Ever-Clear all would do as will sugar water But the Vodka works the best..

Cyano's have a food source in the C.C now from decaying food particles and they feed on the bacteria and lowed Oxygen area is great for them.. Put the sponge back in stir the sand often rinse sponge often and add more circulation across the C.C bottom and add a 1/4 cup of good carbon and change it about 4 to 5 with new carbon and force as much oxygen into the system as you possibly can .