I did the "sniff test" and basically took each rock individually and sniffed each area of it. When I found a sponge that was rank or felt particularly slimy to the touch, I pulled it off the rock and threw it out. It was hard to balance this with keeping the rock out of the water for as little time as possible, but I think it worked out pretty well. The last water change I did, I did another "sniff test" and each rock smelled basically the same as the water. Before, you could definitely detect a "low-tide" smell wherever something was dying.
As far as my ammonia readings, I'm a little confused myself. I have 3 (count 'em 3!) different ammonia tests and all 3 tend to give me different readings. The lowest is always the seachem "dot" in my tank, which seems to just be a rough guess. It has never measured above 0.02ppm and the highest it goes is 0.5ppm which it calls "toxic". My API test has always measured between 1.0 and 2.0 since I began using it. Now it looks more like between 0.5 and 1.0. The last set of tests I bought are the seachem basic marine. When I do the free ammonia test, which way less user friendly than the API tests, btw, it pretty much measured off the charts. I think I'll both this evening and see what kind of readings I get. So far, I think I like the API test better because it seems to be easier to use and I'm thinking those readings seem more in line with the life I'm seeing in the tank.