For any parasite or fungal problems I have always relied on the Maracide-type products, of which there are a quite a few, all fairly specific to the different problems.

Go to your local pet store & look for them. They will tell you on the back, as well as in a very informative leaflet inside, what product or combination of products will solve your problem.

I once had a breakout of ich that was so bad my clown loaches all looked like they'd been dipped in salt. Using a combo of 2 Maracide products per instructions, I lost no fish, & the parasites were gone withing a fortnight.

What you described sounds fungal in nature.

Breezyb,
Thanks for responding!
After I posted here, I searched the internet for more info. I think it is fungal as well. One site I came across said most fungal infections are harmless to fish and that their immune systems will usually take care of any outbreak. Imagine my surprise and delight when I awoke this morning to find no trace of that cottonball tuft whatsoever! Good thing! By the way, the fish that had the affliction seemed completly healthy and happy, otherwise, and still is. Thanks again,
-Robert