I had something like this happen once before, but I also had some lumpy matter of unknown origin appear at the bottom of the tank (in my 10g, three years ago). I did a massive water change, changed the filter (had to re-cycle the tank unfortunately), but I didn't lose any fish, and I had five neons in there at the time, along with 6 other tetras and the same algae eater as current... I guess I just got lucky, but sometimes drastic measures are necessary. Good luck with this!
