Yellow 1st true leaves and brown spots - 3 weeks seedlings

10 Plants - light warrior soil - 5 27w CFLs Daylight

Week one - Great growth, just purified water and started to water w/nutes(Grow Big) on the 6th day to 12th day. 1 gallon water w/ 1/4tsp of grow big split between all plants.

Week 2 - small amount of algae on top of soil, so i scraped off top inch of soil and replaced. Thought i was over watering them so i left the soil dry for 3 days.(2 days before i scraped the algae off). Started watering w/ distilled water mid week.

Week 3 - yellow/dead leaves and brown spots

Only used the 1 gallon water/nutes

Over or under watered? Needs nutes?

I'll be tranferring the plants to either a 1 or 2 gallon container tomorrow and will be adding a 125w cfl daylight.

I see that its starting at the bottom; usually when yellowing starts from bottom to top, its something in your soil. I think that the algae might have gotten into your soil. Algae is a bacteria, so wiping the top layer off wouldn't do much if its already in your soil. I would transplant like you said, flush your soil with "final flush" and foliar spray the top of your leaves with an anti fungal spray (home depot)