What is in the sand is cyanobacteria. Indicates nutrient issues in the water column along with low flow. Water changes with ro/di water will address the issue and your coral should begin to open back up.
With that said, what test kit are you using? Seeing ammonia is not good and not something that should be seen in a properly cycled tank. Seeing the zoas opened up and the torch not completely expelled from the skeleton makes me question that reading being accurate.