Just came to this thread. From what's been posted back and forth, I would first suspect fungus on the wood.
There are dozens if not hundreds of species of fungus in the world; some are not serious to life, but many types are deadly toxic. Having had white fungus on a branch of Mopani (I think) that nearly killed my fish, I wold get rid of the wood. Do a major water change, two a couple days apart, to ensure no remant is in the water. Again, it depends upon the fungus, but what i had caused slightly cloudy water and affected other fish.
If you decide to replace either fish, I wold get either but not both. Farlowella are ravenous algae grazers, and will easily clean a tank of common green algae (or the brown diatoms). This is their food source. They will become accustomed to sinking foods in time, as they get hungry. I have had this fascinating fish for years, and spawned them (which is not difficult, but raising the fry is).