do you have them UNCOVERED once they sprout??? could be damp off if not. Also, I used the spray bottle thing my first year afraid to over water and what happened was the bottom of the soil never got wet, only the top 1/4th inch or so and the roots dried up and the seedlings died.... Your using jiffy pellets so you should be able to tell if they are getting moist all the way down. Even if you water them a little more than you think you should, just let them dry out longer before you water them again.