Sounds like velvet, it's an external parasite and could be ftal, here's some info I found on it...see if this sounds like your fish
Disease Type: Parasitic skin flagellate
Organism: Oödinium pilularis
Names: Rust, Gold Dust Disease, Oödinium, Velvet
Description
The name sounds nice, but don't be fooled. Velvet is one of the more common diseases in aquarium fish, and can strike down every inhabitant in the tank before the hapless owner realizes what he or she is dealing with. Also known as Rust or Gold Dust disease, it is caused by one of several species of a tiny parasite known as Oödinium.
Oödinium is a dinoflagellate, a creature classified by some as a protozoan and by others as algae because it contains Chlorophyll. Oödinium doesn't care how it's classified, it's an equal opportunity parasite that stikes fresh and saltwater fish.
In freshwater fish Velvet is caused by either Oödinium pilularis or Oödinium limneticum. In marine fish Oödinium ocellatum causes the dreaded Coral Fish disease. All three species have symptoms and lifecycles similar to the well known parasite, Ich.
Oödinium finds a fish and adheres using flagellum, then forms rod pseudopodia which penetrate the skin and soft tissues of the gills. The pseudopods destroy the cells and feed on the nutrients inside. After feeding and maturing, the parasite drops off the fish and divides into dozens of cells that are released into the water to seek hosts. They must find a host within 24 hours, or die.
Oödinium produces white pustules on the fish that are much finer than the spots seen in Ich. In fact they are so fine they are often not seen before the fish perishes. Like Ich, Oödinium is present in most commercial tanks, but only becomes a problem when the fish are stressed by poor quality water, changes in the water temperature, or being transported.
Symptoms:
Scratchs against hard objects
Fish is lethargic
Loss of appetite and weight loss
Rapid, labored breathing
Fins clamped against body
Fine yellow or rusty colored film on skin
In advanced stages skin peeks off
Initially the fish rub against hard objects trying to dislodge the parasites. As the disease progresses the fish becomes lethargic, fins are held close to the body, appetite is reduced and the fish loses weight. A key symptom is difficult breathing, resulting in rapid gilling.
Perhaps the most telltale symptom is the appearance of a velvety film on the skin that resembles gold or rust colored dust. The film may be difficult to see, but can be more easily detected by directing a beam of a flashlight on the fish in a darkened room. The parasite is most often seen on the fins and gills.
Velvet attacks all fish and will even affect fry that are only a few days old. Anabantoids, danios, goldfish, zebrafish, and killifish are particularly susceptible to velvet disease.
Treatment :
Raise water temperature
Dim lights for several days
Add aquarium salt
Treat with copper sulphate for ten days
Discontinue carbon filtration during treatment
Because Velvet is highly contagious and usually far advanced before being diagnosed, it is important to take steps to treat it as soon as possible. Treatment is targeted at the free-swimming stage of the parasite.
Copper sulphate is the treatment of choice. It should be used according to the manufacturers instructions for a full ten days to ensure that the parasite is completely eradicated. Atabrine (Quinacrine hydrochloride) is another medication that can be used to treat Velvet.
Because Oödinium is dependant on light, dimming the aquarium lights aids in eliminating the infestation. Increasing the water temperature to 82°F will speed the process, and adding salt to the water will ease the labored breathing caused by destruction of gill tissue. As with any treatment, activated carbon should be removed from the filter, as it will remove the drugs from the water.
Prevention:
Quarantine new fish for two weeks
Maintain high water quality
Provide fish with a nutritionally balanced diet
Velvet usually only arises when poor aquarium conditions prevail and is highly infectious. Quarantine of new fish for two weeks will greatly reduce the likelihood of contaminating a healthy established aquarium. Any fish that appear to be ill should immediately be removed and kept in a hospital tank to avoid the spread of the parasite
