Hold on a second...I think that you might be jumping too quickly to the conclusion that your goldfish killed your Chinese algae eater (CAE). There are other places to look as well, and other information to consider, such as:
How did you acclimate your new algae eater? In many cases, floating the bag with new fish in it until the temperatures match is not enough and can lead to osmotic shock, and an early death. In fact, I would say that it is pretty common to hear similar 'stories' as you as far as adding a fish, watching it appear to be 'fine' and 'healthy' for a couple hours, and poof, it is dead in the morning. Click
HERE to get some good tips, not only on how to acclimate new fish, but also a bit about why (and yes, it speaks a lot about saltwater livestock, but the same issues apply to freshwater livestock as well)
Also, what temperature are you keeping your goldfish tank at? I ask because one of the reasons why these two fish are not really compatible is that one is a tropical fish (CAE) and one is a cold water fish (goldfish). While it may not seem all that important at first glance, temp does make a big difference when you look at the 'big picture' in that keeping a cold water fish in tropical temps will stress the fish and the same can be said about the opposite situation. Stress can, will, and often does lead to a whole myriad of issues we would all otherwise avoid as much as possible. True, most of those issues may not lead to an overnight death as it has in your case, but I also don't think it to be a huge stretch to hear that your CAE could have died due to being added to a cold water tank...if that is the case.
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I'm sooooo frusterated I've thought of letting it go in the local lake but thats wrong and illegal!
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Yes, very very wrong and even if you didn't get caught doing so, I think you would find that many members on this forum could give you an extensive list on why this is also unethical, not only for your goldfish who has no real experience at living in the wild, but also for the other fish in your local body of water. I am really glad that this is not your plan.
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O.K. for these fish to be together if I should have put them together and she said, "NO WAY!"
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Other than the other reason I mentioned (cold water versus tropical fish), there are a few other reasons that I can think of regarding these fish not being compatible. First, the CAE can grow to be rather large (up to 10 inches is the most common estimate I have heard of), and they can become pretty territorial (read "aggressive) in many cases. The other issue that sometimes comes up is that if a CAE (like most any algae eater really) cannot find enough nutrition in the way of algae and other plant matter, they seem to have little or no problem with 'stealing' some nutrition from another fish's slime coat. Of course, this can lead to many of those same issues in which we would like to avoid.
Personally, I think that you might be jumping to conclusions that your goldfish is a killer. Don't get me wrong, I am 100% sure that your goldfish may have nibbled on your CAE, but probably after it was already dead. In fact, I am willing to bet that this was most likely the case with the 8 other goldfish which were kept with this one inside a one gallon tank. I think that if you ask anyone, you would almost certainly hear them agree with me when I say that there is at least some chance that any type of fish would eat or scavenge off of another fish; which is again, what I think is probably what happened here.
I also wonder if one of your toads and/or newt could be guilty of the 'chunk' missing from your CAE. By the way...
What type of toads do you have?
How large/small was your CAE?
What size is your tank (or at least the tank-in-question here)?
What are your water parameters, if you test for them? (i.e. ammonia, nitrites, nitrates, pH, temp, etc...)
What do you feed your goldfish and other livestock in this tank?
How often do you feed?
What is your maintenance routine with this tank? (i.e. water change amounts and frequency, gravel vacuuming)
What type and size filter are you using?
How long has this tank been up and running?
Do you have what you feel is a severe algae problem? If so, what type(s) of algae are you seeing? If you don't know, can you describe it/them for us?
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One more quick thing...seeing as how I know absolutely nothing about any sort of newt, my curiosity got the best of me and so I looked into some 'species profiles' of the paddle tail newt. To be very blunt here, if I am looking at the same newt you have right now, it sounds as though they are pretty territorial themselves and will also feed upon small fish. That said, I wonder if your CAE, which tends to be more of a 'bottom-dweller' than anything else, was attacked by your newt, which I assume (based upon those species profiles) is also a bottom dweller, and a territorial one at that. True, your CAE wasn't completely eaten, however, I wonder if the reason for that is because it was too large for the newt, or a bit too 'tough' for the newt to find appealing.
I also noticed that in many cases, the photos of paddle tail newts that I found on yahoo and google image searches are not always living under water but kept in a tank or area in which both land and water are available (a Paludarium). Is this also the case with your set up?
Chinese algae eater died 
I put the algea eater in my tank and watched it for an entire evening, all was well. The next morning and all that day, all was well. The following morning I wake up to a dead algea eater. I picked it out of the tank and saw a chunk missing from the fish behind it's side fin.
My tank doesn't have anything sharp in it and I asked a different person at the same pet store where I got the O.K. for these fish to be together if I should have put them together and she said, "NO WAY!" I am sooooo upset. I don't know what to do with this vicious fish. I saved it from someone who no longer wanted it and didn't care if it died so they weren't feeding it. It was the sole survivor of a one gallon tank with nine goldfish in it. When I resqued it, it had already eatten its other eight tank mates. I think the fish is ruined
My concern now is that the two toads and the paddletail newt that also reside in the tank will be its next victims. They have lived together for almost a year and everything has been fine but lately the toads and newt have been acting differently, not bad, but different and I think I should heed this silent warning and do something. Help!!!! I don't know what to do, the goldfish has out grown the tank and all I can think of is to get a 55g tank for it and let it get as big as it will. I'm not willing to spent that kind of money on one goldfish that I didn't really have an interest in to begin with but I don't want it to die. I'm afraid to give it to someone with a pond because the only ones I know of have just started their ponds and have goldfish smaller than this one. Any suggestions? I'm sooooo frusterated I've thought of letting it go in the local lake but thats wrong and illegal!
Nikki 
Re: Chinese algae eater died 
Re: Chinese algae eater died 
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