Are you testing your water parameters? specifically ammonia and nitrite?
The live rock is enough to cycle your tank. Using Damsels is an old, rather cruel way to cycle. Not giving you a hard time, just trying to help.
Dye off on you rock is normal and will clear up with time.
I would try to siphon off the dead area, but more importantly you need to monitor your ammonia, nitrite and nitrate. When ammonia and nitrite reach 0, your tank is cycled and ready for livestock.
With the rock you do not need to used the Damsels, IMO
you should take them back until the tank cycles.
Also 14 lbs is not much rock for your tank size. Another 50 lbs or so wouldn't hurt.