Put a layer of sphagnum moss on top of the soil. Water from the bottom.

Seed starting works best in sterile medium with air flow and bottom watering. Compost of any kind contains too many living organisms.

I agree when it comes to seed starting sterile is the way to go at first. For watering I like to use Byrons famous tea recipe, never have damping off with it. Look it up.

I usually allow my worms to work the compost until I have a richer mixture of vermicompost containing primarily worm castings. I don't use it for seed starter, but I mix it with my potting soil for container plants and mix some in the planting hole for my transplants of garden vegetables. In the transplant hole I mix garden soil, a tablespoon of Epson salts and about 2 cups of castings. My peppers, tomatoes and eggplants grow dark green with think strong stems and tasty fruit. My artichokes were large and healthy.

Always start seeds in a sterile medium and after the first set or two of true leaves appear is the time to pot seedlings on into a mix with some vermicompost, as Charlie said (although 2 cups of castings per transplant hole sounds like a lot!). I don't measure when mixing up my transplant medium, but 20% sounds like more than I use. Seeds come pre-packaged with nutrients, so to speak (within the seeds themselves), and do not need more nutrition until they get an inch or so tall, depending on the type/size of the seedling. And, as susanzone5 recommends, bottom water the pots or whatever until you see germination. After that, continue to bottom-water, but allow the top 1/4"-1/2"or so of soil to remain dry after the seeds germinate since that not only prevents damping-off but discourages fungus gnats as well.

I have to stress that the key to preventing damping off (along with the above tips) is air flow. A window cracked open or a fan. The one time in 40 years of seed starting that I closed the window was the only time I got damp off. Never again.

I have been raising worms and producing substantial amounts of worm castings and worm tea for a few years now. My suspicion is that the higher concentrations of worm castings just hold way to much water and promote fungus growth. My suggestion would be to brew you're own worm tea and water the seedlings with it but do not add castings to the starter potting mix. You will get all the beneficial microbes without the excess water retention. The water retention is great in most horticultural applications but probably not with seed starts.