Yuuuuuuuuuuuuuuup !
+1 X2 on the diatom mixed w/ cyano
Never ....Never mess w/ a sand bed unless you are pulling it out of the tank and discarding it! And then there is only one successful way to do that. But to reuse one, Uhuhh.
Anywho lesson learned right. Now to fix the problem. What you have is NTS or New Tank Syndrome or what we refer to as a mini cycle. What you need to do now is first fix the results of the problem then addresss the problem.
1st Chemiclean your tank - Don't fight this stuff till your blue in the face, It is fast, efficient, cheap, and SAFE.
2nd Exportation of your Nitrates and Phosphates and I am sure you know what your choices are on that.
3rd And this is the important part. Get some SmartStart, this stuff is golden. A live bacteria that will immediately cycle your water and eat all the sludge or gunk leaching the trates & phates. To start with use 2 oz per 25 gals X2 weekly for two weeks, then 1 oz per 25 gal X2 weekly for 2 week, then 1oz per 25 gal X1 week for 2 weeks. After 6 weeks algea will be gone. Then follow the instructions on bottle for routine maintanance.
Here's a pointer for using the Chemiclean. Manually remove as much of the cyano and algea from the tank as possible prior to using the product. This will minimize the rise in ammonia that will result from killing the growth. And be sure to remove all exportation media except sponge, floss ect.. and you will need to stop skiming during and after the cleaning process for about 48 hours. But you will love the results from these two products.