@Aang It looks like there is way too much water/condensation under the reservoir lid. If water is splashing up there it is surely over saturating the peat pod.
What stage of the grow is this in? I ask because in early veg it fills to the Medium float mark. That could be part of the problem too.
Considering the techniques I mentioned in the damping off victories thread. Also take a look at how @SilverGrobo has added a spacer or another lid to raise the entire pod up.