problems with the "Kelly substrate"


I am en enthusiastic newbie who set up a 20 gal tank in
august using the bassin soil and vermiculite (2") over
1.5" of 1/8" gravel. The tank is lighted with 2 24" 
fluorescent tubes. Plants include hygro polys., hygro diff.,
rotala macandra, elodea and anubia nana. Fish pop: 4 black
neons, 1 ram, 2 rummy nose and 4 blue-tailed corys. I use an
Fluval 203, and a Powerhead 201 for injecting CO2 with the
DIY yeast method posted on the net. I regularly add Pond Tab
and chelated iron. Everything seemed to be doing just great
until a month ago. I was replanting cuttings from a hygro.
Large bubbles came up, and I noticed that the stems of a few
hygros had rotted. The fish and plants looked ok, amonia and
nitrite registered zero, so I didn't worry about it. Three
weeks ago, nitrates went up to .2 ppm. Several water changes
were enough to bring them down. A week later, I added 4
rummy noses. They all died. Also, I added two new plants, red
ludwigia and cardamine. Both became mushy in a week. One more
rummy nose died, and 3 other corys died also. Nitrite and 
amonia still register zero. I read in different postings
that soil could become anaerobic - could this be the case?
I find it odd, though, because the soil I bought is supposed
to be made especially for aquatic gardens. I'm really at 
loss here.

Thanks ahead.