Hi! I know the feeling, I've lost some Nepenthes seedlings, sown on dead Sphagnum or peat and they died from a fungus ('damping off disease' I believe). I have limited but positive experience with sowing Nepenthes on living Sphagnum. Molds make no chance, and if the Sphagnum is healthy there shouldn't be algae. The seedlings love it, but the moss grows too fast for them. Either you need a slow growing Sphagnum species (some species in bogs, in the mountains or pioneer species are slow growers). Or you need to trim the growing Sphagnum so it doesn't overgrow the seedlings. In my opinion living Sphagnum is the best medium to germinate a huge variety of plants. Even plants that don't like low pH will germinate easily, but they will stop growing after germination if it's too acidic, so they need to be transplanted (which can be tricky to do without harming the roots).