Quote Originally Posted by asintx
Turning yellow, stem gets thinner. It's only a matter of time now.
"Stem gets thinner"? Man, you've got a fungus problem. That is the classic symptom of damping-off. Does the stem also darken, starting at the soil line?

Fresh air and sterile medium, as well as lower relative humidity and very little temperature fluctuation.

You might try using a fungicide if you can find one gentle enough for seedlings. Neem oil is a good one.