Hi,
I don't think your problem is overstocking...You do have compatibility problems. The YT damsel is too aggressive to remain with the dottyback or cardinal...it will eventually kill them off. The sand-sifter goby is not suitable for a 29g It's way too large when mature for such a small tank. A sand-sifter goby needs lots of fauna in the sand to feed on, or it will starve, a 29g is depleted really fast and the diamond wont have enough to eat.
For what it's worth, I would get the diamond and YT damsel out and put a nice dwarf angelfish in there. They are beautiful and very active. They don't need lots of swim room, they love to go in and out of the rock work, and nibble the algae off of it, which is a huge help in a small tank.