Growing mint in water crystals - some wierd fungus?

Hi there,

I recently did an gardening experiment. I'd recently bought some
decent (i.e not grown on really fast - properly grown stuff) mint at
the local market here in London. I'd also got some of those water
crystals - the ones that expand to 100 times their size in water. I
asked for some advice about growing this mint, and it was suggested
that it would grow in almost any condition. So, I hydrated these
crystals and stuck a big bunch of mint in them before I went on hols
for 2 weeks.

I was really hoping to come back and find that they had grown. As it
happens, it looks like they have, but several things have happened -
see the pic below:

http://img134.imageshack.us/img134/4831/dscf1928.jpg

All the lower leaves went yellow - guess the light was being obscured
by the higher leaves.

More concerningly some white fungus appears to have grown on the top
surface of these balls. The balls apparently contain some fertalizer,
though I don't know what sort.

Does anyone please have any ideas about what might be causing this
fungus, or what I could do to remove it!

Also any idea if there's anything I should to do improve the growth of the mint?

Many thanks in advance!

Tom.