We use our LFS, API tests, refractometer and tetra tests. I've been told to throw away the tetra tests-but I've gotten the same readings as the high end ones-so I will use it up until its time to replace them. In the very beginning we struggled with our phosphates, but it was nothing serious, I believe it was because we used tap water instead of DI water to make the sw. We bought the rock from a reefer who was moving and the hydriods were already there. We didn't have anything in the tank besides 20 lbs of live rock that came with the tank. I didn't know that it wasn't bad until I stumbled across it when I was reading about something entirely different.
We went ahead and took a few of the corals off so we could take the rock out. We used a screw driver to remove parts of the rock that contained the three large clumps you could see in the photo. Since we've put it back in (and subsequently had to re-aquascape) I've seen a few small ones here and there. I may try the kalk paste or scrapping them during a water change and having the syphon near by. Thanks for everyones help. I saw some white single ones that I thought were feather dusters and now I'm off to research if we have other bad ones. We have now decided not to buy live rock from anyone without scrubbing and drying them out.