Doug: I do have chlorine in my tap water. So I will use bottled or let
it sit before using. My water is not overly hard, but I do get some
crust of my shower heads.
This is not "damping off disease" I've seen that before but never had a
name for it till your post. The seedlings look healthy, they are
standing and have nice green color. They just have a brown edge to some
of the leaves. I did notice that one of my pepper seedlings has
rust-specs throughout it's leaves.

Also, at what point do I transplant these to real pots? They are in
those Jiffy Peat Pots now, I have seen 1 or 2 root tips out the bottom
on most of the seedlings. I'll never use those peat pots again, I think
they suck.