Suzanne,
Thanks for posting the updates-- somehow I missed them until now. Do you have any photos of the "cleft-lip" neonates?
Water may certainly be an issue here, but I suspect it has more to with other metabolic implications, including diet, supplementation, D3 synthesis (which, as you know, takes into account dietetic D3, lighting, vitamin A, etc) or a combination of all. The fact that livebearers are so difficult to get past the second generation is no coincidence-- we are lacking something in our management.
The issue of water quality may shed some light into this, but may also complicate things a bit as so much of our water already contains naturally-occurring (as well as added) minerals, such as calcium, magnesium and sodium. Distilled water, for example, lacks all of these almost in their entirety, which makes this water very "pure", much like deionized water-- in fact too pure for biological processes.
I would consider using a Reverse Osmosis system if you think your water is the culprit as it does not distill the water by evaporation, but rather filters out excessive minerals found in very hard water. Many still consider R/O water to be less ideal than potable water (low pH), but I suppose that may be more manageable than extremely hard tap water.
Is there a way you could test your water's hardness and pH? Here's a map of the U.S. indicating water hardness:
U.S. Geological Survey's Hardness and Alkalinity Map
You're in a particularly fortunate position given your work as a marine biologist, so I'll be watching this thread closely. Keep us posted on the progress of the remaining neonates...
Cheers,
Fabián