I have used Reef Crystals from day 1 and have had no real issues with it. Not the best salt in the world, but I have yet to have any problems with it... As for diatoms, definitely take a picture so we can check it out. How long has your tank been running? When you test for Phosphates, you always have to remember that even though your test is showing 0, the algae itself feeds off phosphates so the levels are contained in the algae itself. Running GFO is your best option. Also, what kind of clean-up crew do you have? Mexican Turbos, Trochus, Cerith snails, etc. are all good helpers to clean up the bloom. If your tank is still very young, diatoms are a very normal occurance in the cycling process. The algae will eventually starve itself out of existence. You just need to be patient. Still GFO and a good clean-up crew will speed things up.