Sorry about the problems...my guess is your sponge is dead. If its turning white it got exposed to air and is pretty much gone. I had the same thing happen to me. I chucked the sponge ASAP and did about a 50% water change. Within two to three days everything was back to normal. I did another 30% water change after the third day for safe measures.
Not sure if you seen how they bagged the sponge but the LFS should have bagged and tied it under water. The only acclimating you do at home is to get the water temps the same. Sponges are pretty cool IMO but you gotta be careful with them. I hope everything works out.
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