If it's not too late, I agree with tapla--add drainage holes ASAP. Sounds like you might be struggling with a commonly-known problem called damping off--sometimes, it waits until the sprouts are up, and then the region of the stem right next to the soil turns brown and shrivels and the whole thing keels over. Other times, it just inhibits the growth of the seed before it even gets to that point. Either way, it's obviously fatal to the seeds/seedlings. All might not be lost though: if you can get some of the excess water off, there are a few techniques, all of which I have used with success, at preventing damp-off. The first is to brew yourself a nice cup of chamomile tea. Remove and save the teabag. Sweeten to taste, and enjoy. Now, take that used teabag, and make a weak tea. Dilute it to tepid temperature and use it in a spray bottle to soak the surface of the seed-starting medium. I successfully grew begonias using this method--and they're INFAMOUS for damp-off. Most can't keep the surface of the soil damp enough until the plants are big enough to water from the bottom, but spraying the surface works perfectly for the dust-size, surface-sown seeds. It also works for tomatoes, peppers, herbs and the like, but may take more sprays to adequately soak. I have also made garlic "tea" and used that to water plants. It is antifungal and antimicrobial, but it doesn't smell as sweet as the chamomile. Works like a charm for me, though! Finally, you can sprinkle some cinnamon on the surface. I haven't tried making a cinnamon tea, but I would think that should work too. The thing I really like about the spraying method, particularly for small seeds in alot of soil, is that you can wet the area where the seeds are, instead of needing to soak all the soil. If the seeds in these kits are planted in the pot they're to eventually call home, it's usually going to be so much soil that keeping it evenly moist will cause exactly what is happening to you. Gotta get going with the drainage part, though. I HATE it when kits don't have the right stuff! If you can't add drainage holes, at least put some wicks in to help evaporate--strips of newspaper sticking out will wick moisture up and out of the soil so it can dry a bit--it won't look pretty, but it'll get the job done. Also, maybe turn a fan on low and direct it (not TOO close) over the soil. Good luck and let us know how it turns out!

Mold or soil fungus will grow on seedling's soil surface if (a) there's poor air circulation; (b) soil is waterlogged or (c) if the plastic dome or plastic bag was left on too long after germination and/or not left slightly ajar during germination. There's a couple of organic methods you could try to halt the spread of the mold: (1) A spritz of slight foliar-type feed of chamomile tea or (2) A sprinkling of cinnamon on the surface. I've heard kudos for the chamomile tea from other organic gardeners, and I can personally vouch for the cinammon. First try gently scraping off what ever fuzzy white mold you can before either application. Good luck w/them!

I have found the plastic trays from Lowe's or Home Depot, the ones that hold the larger pots until they are sold are PERFECT. they are about 4 to 5 inches deep, they have holes in the bottom already for drainage and there are 6 spots, so you can plant all one thing or several things (just be sure to label well). They obviously come in different sizes and style, they all work :) Peat pots BTW are the WORST and I'd never use them again. Styrofoam cups work 1000 times better to me. I also recycle the plastic 6 pack trays that most plants come in. Notice the big plastic storage container in the bottom right corner of the photo...these work great too. here are some pics of seedlings in these. I have also taken them from these containers and then transplanted them to the styrofoam cup after they get their first true leaves...They to the garden. PS: They are free. And these take out trays work great too

Thought of another thing you can make seed pots out of, paper towel rolls and toilet paper rolls, free and you just have to bend in the bottoms. It wouldn't be a long-term thing but if you are short on cash it's a good method. tape the bottom close and when you go to plant just remove the tape and open the bottom. You should see condensation on the inside of your bag. It shouldn't be excessive but you should notice it. If the paper towel looks dry spritz it with water very lightly. Don't over-do it or your will get mold. When I had the tangled tomato mess one thing that I know contributed to it other than timing was putting too many in there. Make sure the seeds are spread out a little on your paper towel so they can grow a little.