The sand in the other thread looks like simple play sand. It is very cheap but full of dust and takes forever to wash (took me over an hour to get a bag clean enough to use). That is where all the cloudyness and muddy color come from. I know you have it set up now but layering with sand has a problem. As the tank vibrates (from normal ground movements to those cause by normal foot traffic around the tank), the sand will eventuall filter through the coarser gravel and all end up on the bottom. Sand can be used as a base but not as a top or middle layer.
(afraid I haven't got anything useful to say re the ammonia puzzle though
)
but settled very quickly.