i make snail jello for my apple snails and yes, it will set much better in the fridge. i wouldn't put it in the freezer to set, that might be the cause of the wateryness.
here is the recipe that i used and it worked great (see below). omit the calcium supplement and use baby food that is suitable for the type of cichlid you have. herbivorous cichlids would probably enjoy the vegetable baby foods, such as mixed veggies or peas, and omnivorous would probably like any flavour, maybe try the meat and potatoes one? i use vegetable and fruit baby foods (heinz brand) for the snails.
Recipe:
Snail Jello
1 can of baby food (4-6 oz)
1 tsp+ fish food (may be omitted)
Calcium/vitamin supplements (I use 1tsp Jurassi-reptical powder w/out phosphorus)
1 packet (= 1 tablespoon) unflavored gelatin
You can select any fish food and any flavor of baby food that you like. Try to find baby foods with at least 4% calcium (vegetable medley has a higher %), either fruit or vegetable types are find. This is a good way to feed fish foods that are good for snails but don't sink, like freeze-dried shrimp, or fish foods that have a strong smell when cooked in other recipes. You can mix in much more than a teaspoon of fish food, and including the ingredients of a "snail trail mix" instead of a single fish food would make this snail treat more nutritionally complete.
Instructions
Open the baby food and pour it into a small bowl. Heat the baby food in the microwave for 60 seconds (caution, it will be very hot).
Stir in the unflavored gelatin (add it slowly to avoid unsightly clumps of gelatin; don't use a blender or you risk creating air bubbles that will make it float) crushing any lumps with the back of a spoon.
Add calcium supplements and vitamins if you have/want them. Stir thoroughly.
Pour this mixture into a dish with a flat bottom (tupperware-type containers work well; if you are doubling or tripling this recipe, you might consider a pie pan).* Fold in your fish food(s) if you are adding any.
**I lined the dish with plastic wrap to make it easier to remove later for cutting**
Refrigerate for several hours, then return and cut into cubes.
One jar of baby food yields a good handful of snail treats. Keep them refrigerated until serving. These sink and hold up pretty well in the tank, but as with any food, large uneaten portions should be removed after the snails have finished. These can be frozen for up to a month.
*You can use an ice cube tray to create big treats for a tank full of snails. No slicing is needed in this case.
i used the ice cube tray method and only filled each section with about 1/2 to 2/3 full. put it in the fridge and it was set in just a couple hours. i then took the cubes out of the tray and put them in a ziploc to freeze. You will most likely need a teaspoon to get the set cubes out of the ice cube tray, i did.
if you are using fresh or thawed out shrimp i would get as much water out of the shrimp as possible before you mince it and mix it in. maybe lay the shrimp in between layers of paper towel and blot the water out?
if you are using shrimp pellets, just crush them into powder/fine peices and mix it in. you could also add a touch of garlic to make it more yummy for the fish, but make sure it is minced very very finely and moisture is removed. maybe garlic powder instead?
hope that helped!