You have a lot of variables going on:
1. You added non-quarantined fish. From breeder or store, you don't know what they might bring to you tank. ALWAYS QUARANTINE NEW FISH!
2. You took a Cichlid from an existing environment and put him in a new one. This causes a lot of stress.
3. You may have stirred something up out of the substrate when you switched it over. Doubtful in this case because of the direct exposure to O2 should have taken care of any anaerobic bacteria.
4. You added driftwood that may not be safe for the fish tank. A lot of decor for Terrariums are not safe for Aquariums including the wood. Also, how well did you store the wood for 7 years? It could have been exposed to something in your home that is toxic to the fish. I would remove it.
5. You began introducing CO2 to the system. Normally, it may not have harmed the fish, but you had already stressed him, so it could be a cause. You stated you started the CO2 at night? Thinking that the plants will not utilize the CO2 at night while the lights are out, it would not have been the best time to start the CO2.
Eliminate variables like removing the driftwood and you may kind of figure it out. Of course, sometimes fish just die and you can't explain it.
