Greetings Mike,
I don't personally use sourdough hooch as a starter, but there are others who do. I
When I choose to use a starter,which doing so is just an option, I use whey from yogurt....and I don't have issues like you describe.
However, I still use a mild salt brine(nowhere near 10% though) even when using a starter. In part,the added salt will retard the growth of molds and such bacteria and the lacto bacteria (LAB) get started reproducing.So if you didn't use any salt in ferment #2, then the mold causing bacteria might possibly have become dominant. Additionally, using high levels of salt(and 10% is pretty high) will not only retard the mold causing bacteria, but can also severely interfere with the initial growth of the LAB and slow down the fermentation significantly.
Here is a link to some info on the progression / stages of LAB development :
http://thehotpepper.com/topic/23146-fermenting-peppers-101/?p=1022270
Beside temperature, sunlight can lead to some "darkening" of the ferment. I try to always place mine in or pie safe or dark cabinet, but another trick I've used is to slide the jar down inside a black sock or dark pillow case.
As you probably know, the while growth is probably a harmless yeast growth, whereas any dark growth is highly suspect and quite possible a mold growth.
Here is another link about how to recognize mold and how to prevent it. (Plus there are some great pics posted by RocketMan
http://thehotpepper.com/topic/47444-why-your-ferment-grew-mold-what-to-doand-how-to-prevent-it/?p=1003009
And yes.....the smell almost always is the best indicator...so following your nose is wise (as is pH testing)
CM