Two fish dead, water looks fine...

If your killing damsels then you have a problem with that tank. Sounds like a parasite of some sort.

 

That sucks, I guess I could put another damsel in there and see how it does. I don't want to be cruel though. I checked my salt level again and its actually 1.022. But I'm not really sure I even want fish in this tank. I was thinking to just go invertebrate with a couple fish. And I think I mentioned before that it looked like it had some ich.

 

You are going to start to have issues if you don't get an RO unit or buy water from your LFS. Tap water will cause problems with your SW.

 

The specific gravity will be affected by any dissolved substances. It just happens that salt is overwhelmingly the biggest solute in a reef aquarium. When you stir the sand, you will put some of the particles into suspension which will raise the specific gravity-but not the salt content. Since sand is not water soluable, the particles eventually settle. How much does the SG change? For how long?

 

Why are you stirring the sand? You should not touch the sand bed at all. Some people say to gravel clean during a water change. DONT DO IT! Only making problems. You need to not add any fish for about 6-8 weeks to make sure the ick is gone. Get the SG 1.025 and I believe in the API Reef test there is a KH (Carbonate Hardness) test kit. I use it. How much LR do you have?
Adam

 

Tap water has a certain concentration of chlorine and chlorimine that is extremely toxic to fish. Most salt mixes have ingredients to neutralize that, but it won't get it all out if your area uses a high concentration of it to kill bacteria in the municipal water. Also, a ton of heavy metals are in tap water as well. I think we have found the source of your death now. Invest in an RO/DI system soon, they are about $150 for a good one on ebay, and will probably be one of the most effective and beneficial investments in aquatic keeping. Besides that, it will help keep your fish alive.
Oh, it's suggested not to stir up your sand, but it's not something that will kill your tank. It will release dissolved nutrients (which will lead to elevated NO3) into the water column that will irritate the tank inhabitants, but nothing that will flash kill them. The older the tank is, the more "toxic" (if that is even the right way to put it) the sand will get, so a new tank water chemistry will not be affected as much as a tank that is a couple years old.