I have 3 otos in Flair's 5 gallon tank. Everybody does just fine. The otos do their own thing and Flair does his. How long are you leaving your light on for? You may need to cut back on the amount of time the light is on.
I know how you feel! In my 17gl community tank i have this black silky long algeae tha turns magenta when i clean the tank ( try to get it off) an man is it a pain!! what is that kind of algeae anyways??? :s