Hey briggsey09! If I haven't already said so, welcome to the forum!!!!
Sorry to hear about your problem, and also for the delay between your posting this concern/question and receiving any replies. To be honest, I am willing to bet the lack of replies has come from a lack of information - however, not so much in the form of your description, which is good, but more along the lines of the answers to questions which you can find by clicking
HERE. I truly believe that if you could provide the answers to as many of those questions as possible, you would almost certainly receive faster, more accurate replies.
I will also see if I can garner the attention of some planted tank enthusiasts who may know much more about the effects of iron on fish since they are likely using iron supplements for his/her plants.
I have heard of a few causes for pimple-like formations being found on fish in the past - for example, a bacterial infection, a fungal infection, scar tissue, etc... - so without knowing more, it would be hard to narrow things down to one item. However, my gut feeling is that these pimple-like formations, and many of your other problems, stem from a water quality issue...hence, it would be good to know more about your water parameters and such. It is also rather common for any burrowing type fish...including the peacock eel...to be injured when the substrate is not ideal for the burrowing 'habit'. Based on my own experience with peacock eels, I would have to say that a fine grain sand is the best substrate for them - and even then, I suggest choosing which sand to use very carefully. Of course, this is all not to mention the fact that a 10 gallon tank is much too small to keep one of these eels on any sort of long term basis...but I am sure you already realized that.