Beginner Gardening: Yellowing and leaf drop of bottom leaves on pepper seedlings, 1 by WonderWeasel

WonderWeasel wrote:
Hello--

I started pepper seedlings indoors about a month ago (Takanotsume, NuMex Jalmundo, Hot Paper Lantern, Jamaican Hot Chocolate habanero, Datil, Fatalii, Red Caribbean habanero). While still in the peat pellets, a few of the seedlings began to turn yellow. I quickly transplanted them into clear 10 oz. plastic cups (w/ drainage holes) filled with miracle gro organic choice potting soil and a distilled watering of half strength fish emulsion, and that seemed to do the trick. Over the past week, though, several of the seedlings' bottom leaves have turned yellow and fallen off. They are only watered when the dry dirt in the cups reaches 3" from the top, and only using distilled water. I pH tested the soil, and all are sitting between 6 and 6.5. Also, I've included a few pictures of some of the affected seedlings. Thanks for any and all help/suggestions!

--Jordan