SEACHEM CLARITY KILLED MY LOACHES!!

If you had any measurable ammonia THAT consistently then I think that answers your question.

I still don't know what would have caused a trace of ammonia to suddenly become so toxic. Prior to adding anything to the tank my fish where healthy and happy.
 
The ammonia levels in that tank have always hovered between 0 and 0.25, again probably because of overstocking.

This is vital information. Weekly water changes are the norm for any tank, but overstocked ones with measurable ammonia need much more than that. I'm sorry about your fish. It's obvious you care about them, but you must keep an open mind and accept responsibility so you can learn from it.

Fish are able to adapt to stress for a certain period of time. They may even look and act normal during that time, but their energy reserves are slowly being depleted by trying to cope. If the stress continues or increases they will eventually become overwhelmed. It may seem sudden, but it's really not.
 
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It could have also been oxygen deprivation (medication robs the O2 from the water, quite possibly dosing other things would as well) although if you didn't see them gasping at the top, but instead just saw burned looking fish, it doesn't seem like it would be the prime suspect here.

It is a brutal lesson learned for sure, but the lesson is really not to overstock your tank...this is a drastic example, but always with overstocking this is what happens. Everything is fine, until it's not! Are the killifish still alive?
 
Incidentally, even a trace of ammonia is very toxic...like poisoning, the effects are cumulative. If you had ammonia present, you probably had nitrites as well, I know nitrites bond with hemoglobin in the blood, resulting in blood that is starved of oxygen.

Very few fish can withstand prolonged ammonia, that is why only a certain few are considered hardy enough to be "starter fish"...common goldfish, zebra danios, etc.
 
Not sure if it is because of the environment they come from or what, but I've found that with loaches (at least the ones that don't live in lakes or creeks) death tends to cascade through the tank. A single one finally goes over the edge, causes a temporary spike which pushes another over the edge and so on. By the time you check the water it is often balanced back to the original point.

I lost a few recently from changing my lighting from very high to low on a tank. Had a rather large nitrate spike until the plants adapted.
 
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