Sorry I can't be of more help... I'm not sure what it is honestly. I've made a post here about my Catfish as well since I'm so confused. I did find a large plastic bin, about 7-8 gallon size that I've set up with a filter, aeration & and put him in. He seems fine while medicating with the API Fungus Cure, he's been real active, checkin out the new container he's in, but still not sure if he's getting better. His "cotton" look over his sores looks more like plain white, muscle tissue now. The medical bin I have him in helps cause I'm not affecting my Cichlid and I'm not using nearly as much meds vs. the amount needed for a 55. Right now I have a UV filter running through the 55 gallon as well to help kill the bacteria, fungus 'n' such that's been left over from my Balas dying and this issue w/ my cat.
Your best bet is really looking into the main issues w/ the Balas and finding out if you can pinpoint it as being bacterial or a fungus... I know mine was probably a fungus b/c they looked like they were flaking and their eyes were all clouded, but on the same term, I did have a Bala that had red patches on his side & under his chin, so that seems bacterial. It didn't look like "cotton" on them, more like "flaking skin", but it's strange b/c they showed signs of BOTH fungal AND bacterial, but the Maracyn definitely didn't help. That kind of blew me away b/c I've always gotten Maracyn to help w/ wounds and such. As said before, they died before I could try a fungal treatment... it's so difficult b/c Balas seem to die quick when they get affected. You could try to put them in a smaller container of some-sort w/ aeration and filtration and try medication... at least you gave it an effort then. Maybe take some photos and talk to someone at a local fish store. Also, check the pH, ammonia, nitrites, nitrates, etc.. of your tank as well...