HI, WELCOME TO FISHLORE!
It sounds like Hole in the Head....I don't know if loaches are prone to this or not, but I
do know they are sensitive to water conditions. Can you post a picture?
Your tank appears to be extremely overcrowded....Bala sharks are too big for a 38 gallon tank, and lastly yoyo's need to be in a group of 3-5 at least!
With a redtail in with the balas I would say there is also a bit of stress in this tank, all of which could cause this yoyo problems. You have approx. 86" of fish (adult) in a 38 gallon tank, the rule of thumb for stocking is 1" of adult size fish per gallon of tank. You count the adult size even if they are babies, so you don't overstock. The balas themselves need a tank at least 72" long as they are very active and grow up to 13"!
I don't know what you are testing your tank with, but with the stocking you have I doubt that 5 is a correct reading for nitrates. First thing you need to do is make sure on this by doing more water changes than normal...What is your schedule for water changes now? Hole in the Head is thought to be brought on by poor water conditions, and a lack of variety in the food, possibly low in vitamin C. What are you feeding?
You either need to be feeding a variety of the highest quality food you can find, or making you own. This is what I have gone to, that way I know just what is in it, and I add vitimans and expecially Ester-C....If you can't do this, vita-chem is available at
www.drsfostersmith.com , Good Luck !