Steve, Keep the liner ABOVE ground. No drain holes if sunk in ground.

Google "Flea Beetles" as I believe they are your pests in question. There are a few chemical treatments for them, though their damage tends to be mostly cosmetic and they tend to move on as the season progresses (from my experience). If you look on the plants, search them carefully, you may find a few small beetles on the plant - when you do, feel free to crush them, that is also effective :)

I tried that this spring and the tomatoes looked horrible, all yellow. After I removed the plastic, they slowly improved until they look fine now. What seems to work better for me (and looks better too), is a thick layer (at least 8 sheets thick) of newspaper and then an inch or so of mulch on top of that. I soak the newspaper and tear it up into smaller sections and arrange them around the plant in the pot to cover all the soil. Then I sprinkle the mulch on top. When I need to water (which is a lot less often with the newspaper), I lift up the edge of the newspaper and water the soil directly, so no water touches the leaves. I think the damp newspaper also keeps the top couple inches of soil in the pot from getting too hot. We've had some high 90 days here already and the tomatoes look fine so far.

I certainly don't see it as a possible bacterial canker at all. I too thought maybe it was the work of a cutworm, but thought they did not bother plants so much once they got bigger like yours...but then again, it was not able to totally cut through the stem. That may well be what it was. You may want to consider protecting them with some sort of collar around the young plants, but I don't know how that might be done if they are planted out. Sue Here is a link that might be useful: Cutworms