Otos are pretty sensitive to water quality and environment, but I've never heard that they're sensitive to melafix. (I have my issues with melafix and think there are better ways to treat what melafix is supposed to treat, but I haven't heard a lot of people make a negative association to using it with otos.)
It's a 56g tank but was it well established with a good source of algae in there? When I say well established, I mean beyond cycled. Otos often have problems in tanks that don't have a good supply of fresh algae to munch on. And ... what were you treating the tetra for?