No, don't start over, you're in the middle of cycling right now. Don't let those fish have died in vain. There's no fish in there now, corect? (Did you read up on fishless cycling yet??) If there's no fish in the tank dump some food or straight ammonia in there to keep up an ammonia source (since there's no fish for an ammonia source) and wait til your nitrites go to '0' and you start getting a reading for nitrAtes. THEN you're cycled.
Read up on fishless cycling and it explains it all.
Edit: Just to make sure-you're salinity was checked and you're using marine salt, right? Not aquarium salt? Sorry for the should-be-obvious question but I had to ask.
This is wrong. Water from a cycled tank holds NO beneficial bacteria. The BB is in substrate, decorations, sides of the (cycled) tank, etc. Not in the water column. I wouldn't use live fish. That's just cruel and fishless cycling would be faster anyway.