Joker,
You could have more than one problem, the erratic swimming could have been caused by a gas bubble that forms just beneath the seahorse's skin, they normally appear on the head, but can also appear on other parts of the body.
Another diseases that affect the seahorse is fin rot, the most apparent area being the dorsal fin. This is easily noticed by by a fine white line along the edge of the fin.
White spot disease (caused by the micorsporidian parasite). The white spots are actually cysts filled with spores. This disease, called Glugea is normally fatal, and it is recommended that you isolate the infected seahorse asap.
There is also saltwater ich, the 1st signs are tiny spots easily seen on the transparent dorsal fin. This protozoan acts as a gill irratand and breaks down the seahorse's skin. It reproduces rapidly, and causes respitatory problems, where as your seahorse will have problems breathing.
The problem that you have sounds like a fungus. Unlike Glugea, it has a fuzzy cottonlike appearancce. It normally takes hold where an injury has occured. It can be treated by brushing it with a cotton swab dipped in Merthiolate, and then coating the area wht a paste made of sulfathiozole sodium mixed caster oil. Isolation is not needed, but it should be treated daily until the fungus is gone. The fungus can also appear as a soft spor filled with pus.
If there is a lot of fungus, not from a localized injury, it could have been caused by the seahorse getting chilled. The best way to treat it is to raise the water temp to 85 -90 for most of the day (be sure to increase areation too) and repeat this for several days in a row. It is also a good idea to add 1 teaspoon of sulfathiazole sodium per 5 gallons of water if possible.
There are also other parasitic diseases which attack seahorses such as Argulus. These small flat-bodied parasites appear as semi-transparent bumps, ranging in size from 1/16 to 1/4 inch on the seahorse's head or neck.
Stress and water quality can play a major factor on how the seahorse is affected by these parasites and fungi. I hope the information that I provide gives you a little insite in to your problem.
The majority of the information from this post was from "A step-by-step book about swahorses" by Peter Giwojna copyright 1990. Being the information is about 13 years old, and ton of new information may be available on the web, it may a good idea to research the treatments here before using them.
You could try seahorse.org, or do a search on you favorite search engine for seahorses + disease or seahorses + fungus.
Best wishes with you seahorses...
