I'm going to pick up a test kit and make sure nitrite/nitrate is 0 before I even think about adding more fish.
you really should not have added any fish without doing this first. Check out our article on Cycling Without Fish
. When you're out getting test kits, buy the all of the ones you will need to regularly check for.
Ammonia, Nitrites, Nitrates and ph
Those are an absolute minimum.
I would also suggest Alkalinity and Calcium (I assume you already have a sg
It would be my wager your 5 damsel is already on his way out. If it is at all possible, net him and return him to the LFS
. They may not take him if hes already looking really bad. If thats the case you could put him in a Quarantine
except with FRESH salt water (not water from the tank as suggested in the artcle) and do water changes in the QT over couple of days.
Once your tank has cycled completely, then you can begin adding fish. Don't worry, most of us here have made this same mistake the first time we started a tank (including myself, I was lucky enough not to lose any fish) live and learn