molding seedlings

I have seedlings in a starting tray with a capillary mat under a grow light. Everything was fine until I noticed white stuff on the soil surface and some dying seedlings. I sprayed the tray with Neem oil. Things seem better. Any ideas how to prevent/treat this problem. Input much appreciated.

Mine were in the jiffy kit with heating mat , clear top , heating pad, heating pad holder , jiffy peat pellets and tray .
I soated peat pellets in H202 mixture with a capfull of supertrive . Everything moldy about a week later -[ 3rd week in Nov-2005]
I took off top drained and unpluged , had to leave , 2 days later I came back .
No more mold . sprayed with H202 and watered then ploged back in . all but 1 seed sprouted [ 71 ] .
Now I spray everyday with H202 water . No more mold
H202 mixture = 1/2 cup H202 [ 3 % I buy at $1 store ] , 1 gallon distilled water .

Another product that iuse for my seedlings is called Soap Shield. It cleans up and prevents diseases. I buy it from www.gardensalive.com. I spray the seedlings twice a week with it. In one quart water, mix 8 drops of soap shiled and shake and spray.

Good luck! and Keep Gardening

barksy, one thing I do to prevent mold and other diseases is I sterilize my soil 10 min in the microwave in a gal ziploc bag, I check it with a quick read meat thermometer. 180% f.

Thanks everyone for the ideas. Once the seedlings sprouted, I removed the plastic lid. I have to use a capillary mat as I am terribly absent minded and would forget to water for sure. I am going to try the soap spray. Looks like the mold took a heavy toll but I may get a few plants going. Have to give it another try with some of your techniques. Thanks again

These are great suggestions- have had this problem off and on over the years and just figured it was my tendancy to overwater. You guys are all so smart!

I had mold problems (damping off) with my first couple of batches of seed, but sterilized all my soil after that and started using H2O2 and have had no more problems.