I would double-check that those are not root mealy bugs. If those white spots are fuzzy/fluffy, that's a big sign. Google photos of root mealy bugs and see if that's similar to what you saw when you pulled the plant out. I seriously doubt you would have mold from 5 minutes of rain. If your plant is infested with root mealy bugs, that could account for a lot of problems. Glad to hear it seems to have grown a few inches, though. Check into that, and if you can't rule out mealy bugs, look up the treatment for root mealy bugs. I'd keep the plant out of the soil for the time being; if you do have bugs, that will be the easiest way to clean it, and if the roots are too wet, being in the dirt certainly won't help. I'm sorry that you are having so much trouble with these; clearly something is going on!

I have many San Pedro, some much larger and in much smaller pots so I dont think planting it in the ground is the issue. Suggest you use what we call in the UK John Innes type compost. This has sand and is low in humus content. It drains quickly which is key with cacti. As for the brown scar I suspect others are correct when they say is is sunburn. I have it on some of my plants alos- I think we sometimes overestimates cacti love of sunshine. As for the rock in your garden- these plant typically thrive in denuded soil but by the look of the soil you have used I would suggest repotting with sharp sand mixed in for added drainage. Of course a little cacti fertiliser that is low in nitogen would help. Good luck! As for cutting the tip off and starting again- that way you can avoid the scarring and the base will srout new clean shoot also. Just remember to let the section you cut off scar (callous) for a week or two before you place it in soil- refrain from watering the cutting until roots appear. I could send you a link to my site but understand that it is forbidden on here- there is information on soil mixes there. Good Luck!

I wouldn't worry about the soft pup. I'm guessing it's soft because it's dehydrated. You could leave your cutting that big or cut it. I would think cutting it you may get roots faster because (I hope this makes sense) the plant is using energy to keep the big cutting alive. If you cut it then I would think it would use that energy for roots instead of being wasted on keeping the tall cutting alive. I can't explain that well;). You will get roots either way. Just keep out of bright sun and no water till roots.

Fill a pot about 3/4 full with commercial or homemade cacti/succulent soil. Press it down with your fingers or a spoon. Then sift some soil and spread it over the top, leaving a gap of 1/2 to 3/4” between the top of the soil and the top of the pot. Then put the pot in a pan with water and soak it, until the water has reached the top of the soil. Then take it out of the pan and let it sit for about 15 mins. Water will drip out the bottom, but that’s okay. Then spread your seeds evenly across the soil in the pot, and cover them with a thin layer of sifted soil or sand. It’s okay if not all of the seeds end up completely covered, but 50% or more should be completely covered. Moisten the soil with a spray bottle. Then cover the pot in clear plastic like saran wrap, and put it in a location where it will get indirect light. You need to be careful to get the right temperature, remembering that the plastic covering will increase the temperature the same way that the inside of a vehicle heats up when it sits in the sun and the windows are rolled up. In my experience 80 degrees is a good temp for these seeds. If you don’t have a thermometer feel the soil and compare to the temperature of your forehead. It should be a little cooler than your own body temperature. You should start to see sprouts within 7 days. I’m basing these instructions on my experience growing Bolivian Torch Cactus, which are in the same genus and very similar, and also contain mescaline. Incidentally, if you bought these seeds on Amazon, there’s a good chance they won’t grow, especially if they came from China. My suggestion would be to do this 7 seeds at a time, in 3 different plantings. The reason being that you’re likely to mess up in one planting. This way you have 3 chances to get it right.