Stem rot! Not sure as to the best fix for it though.

It is my understanding that the main cause is too much moisture coming in contact with the stem. It happens sometimes in Rapid Rooters when one doesn't squeeze out enough moisture before planting the cutting. The stem is in constant contact with the wet surface of the R.R. and slowly begins to rot. I've done a little research for you, but it seems a cure is hard to come by. I've seen some articles that mentioned using a fungicide, since it is a living fungus feeding on your precious plant.

Sorry for the bad news. Do a sh*tload of research before doing anything drastic.