Sad to report the damsel died. The day after the original post, the fish disappeared. I found the fishes body today. After inspecting, the gills were actually fine and a normal color. The red was coming from internal organs a little bit back from the gills. No external lesions, no flukes, no spots. Any thoughts on what could be the cause? The third photo shows a dark purplish red directly back from the gills. I also dipped the dead fish in fresh water, nothing much came off the fish, a scale and some mucus with sand stuck to it.