High Nitrite & Fish Are Dying

[Mamashack]

hi everyone I have a nitrite situation that I don't understand at all. I have just set up my old 30L tank to make room for the expected platy fry explosion sometime in the next week. Used water from the existing 60L to half fill the 30L and topped up both tanks with dechlorinated tap water. Have been seeding the sponge in the 60L tank for just over a week now and planted the 30L with java fern, egeria densa and cabomba caroliniana to help reduce nitrogen waste effect. 30L tank stats good pre transfer of fish - am about to check them again and will do so twice a day for a week or so unless the results increase and dictate pwc.
 
Problem 1: 60L tank stats as follows - pre water transfer - pH 7.6, NO2 0ppm, NO3 10ppm, NH3/NH4 0-0.25ppm - removed 16L into 30L tank. After top up - pH 7.8, NO2 1-2ppm (??) NO3 5ppm, NH3/NH4 0-0.25ppm. Panicked and remembered seeing a Dr Tim video which demonstrated how API liquid tests can give false negative results and only when diluted does the positivity show up. I wondered how this could be tho as all my fish including the fry seem to be well. Did another NO2 test immediately and low and behold it was back to 0pmm. How did that happen???
 
Probelm 2: Also I transferred the magnetic algae remover back to the 30L tank and got a newer larger one for the 60L. It has been giving off tiny air bubbles since I put it in the 60L and there now appears to be an oily film floating on top of the water. Have tried with no effect to remove it with kitchen towel. What on earth could it be and how can I remove it?
 
Any help or explanation would be much appreciated!

 

[Mamashack]

Update: 30L water stats are stable, 60L NO2 still negative, oily globules still there but appear to be getting smaller tho wider spread. Hmmm interesting!

 

[Mamashack]

Good news first - the oil slick has gone and the 30L water stats are stable at the moment.
Puzzling news - the 2nd and 3rd nitrite test in the 60L yesterday were 0ppm, but this morning the first test taken from the top 1-2" of water tested 0.25ppm (a lot less than yesterday but still +ve!) but a 2nd sample taken from about 5" below the top was 0ppm again. Why is it happening? Luckily the fish all seem to be ok apart from being curious about the floating hatchery which I've put in this morning as the next batch of fry are due in the coming week and I wanted them to get used to seeing it around. Don't know if that's important but I thought I try it.