It could have been a few things like flukes, ancor worms which a simple fresh water dip for a few minutes would have made most of them drop off. Could have been Ick or Brooklynella which fresh water dip would have helped him in the short term as you have to treet these diseases. Some articals to read do your research, it helps and you will not make as many rushed disitions. researching will slow you down and make you think about the situation. remember slow is always better. It is better to go slow and not loss every thing.
As for your soft corals if there is a little bit of a scrap left it may grow back.

Here anything with copper, formaldehyde is dealy to saltwater fish in higher dosage and corals low dose. There is many chemicals that are sole to treat fish that you can not introduce to corals as they will kill them, so be very carfull.

formaldehyde is used to treat Brooklynella it is the only thing that will kill the parisite.

Brooklynella is a type of saltwater ich caused by an infestation of the ciliated protozoan Brooklynella hostilis. It is most closely and commonly associated with subfamily Clownfish members of the Damselfish family, and therefore is typically referred to as Clownfish Disease. Although this parasitic scourge similar to others requires a fish host to survive, it is not particular in its quest to find one. Angelfishes, tangs or surgeonfishes, wrasses, jawfishes, and seahorses among others will host Brooklynella.

These protozoa reproduce asexually by means of simple binary fission through conjugation, which is why they are able to multiply so much more rapidly than Cryptocaryon (Marine Ich/White Spot Disease), and Oodinium (Velvet/Coral Fish Disease), and why it can kill fish within a few days and even hours upon recognition. For this reason accurate diagnosis and immediate treatment of all fish exposed to these life-threatening organisms is critical.

The above exert was cut and piasted form one of the articals below. This disease has been miss diagnosed for decades and treated wrongly acording to other articals I have read on the net. I believe I found a link on 3reef to the artical.

http://saltaquarium.about.com/od/ich...ooklynella.htm
http://saltaquarium.about.com/lr/saltwater_ich/34343/1/
http://saltaquarium.about.com/lr/hyposalinity/34343/3/
http://saltaquarium.about.com/lr/fish_diseases/34343/2/

I hope this helps someone,
Bill