Mummynicks said:
I am beginning to wonder whether all these potions you can buy for the fish are actually worth it,?
In most cases, they are not, you're right, more trouble than they're worth. They treat symptoms they do not remedy the actual problem, which just means that the problem will reemerge at a later time. The manager at the lfs that I frequent can't stand them, but he sais that he can't afford not to carry them. He doesn't carry any "algae destroyer" crap yet, but he told me he's being pressured to do so. He's in a tough spot, when people come into the store he advises them about proper maintenance and keeping fish healthy and never pushes product on anyone, but at the same time he sais that people just come in looking for the magic pill (or potion as you put it

) to set everything right, make the fish happy, never need water changes, etc. They usually just let him talk then go out to one of the other pet stores and buy the 'magic potion' anyway. Every now and then one comes back after spending tons of money on new fish and various potions and wants to do things right, but in the mean time, he's lost a customer and the income in most cases.
Sorry for the rant, apparently I'm feeling sanctimonious today.
Anytime you face a problem, the key is to determine what is causing the problem. Which is exactly what you're doing, kudos.
The cloudiness was caused by an imbalance in your tank. A sudden change in water parameters led to a bacterial bloom which now that the tank has been stable for a while is starting to clear out as the tank's microbes come back into blance.
As for the 'sore' on the nose, has he had any other behavioral changes?
Do any of these look familiar?
http://www.2cah.com/pandora/Disease.html
In all likelihood, keep the tank clean and conditions healthy and he will recover on his own. But in case it's something else, the above should help you diagnose it.