What is the best way to treat this?
Cheap solution. Purchase a children’s wading pool and use it to treat your fish. Another option would be to use a large, more compact container and give your fish 'baths' with a slighty higher dosage of medicine than recommended. Sorry, but I cannot suggest a remedy (medicine) as I've never dealt with this issue.
Also, make sure any decorations are free of jagged or sharp edges. Keep an eye on the crayfish as well.
The carbon is in one of the filter trays in my Marineland Model 4 acrylic sump. I figured that it needed to be there to maintain my nitrates? Wouldn't I lose all of my bacteria if I took that out? I also have two bio wheels though and maybe that is where my bacteria lies? Should I take out my carbon and treat with medicine?
I’ve heard many times that carbon sold for aquarium use is not very effective long term. I’m sure beneficial bacteria have taken up residence in the carbon, however, I bet your filter pads, bio-wheels and decorations (wood, plants, rocks) hold more beneficial bacteria.
Also, I would recommend changing a good portion of the water. If you don't notice any improvement with your fish in a few weeks, it might be necessary to treat the whole aquarium. You could easily remove the fish to a children’s wading pool, and lower the water level of the aquarium to save $ on medicine. Remove your Bio wheels and keep them running in order to quickly re-introduce beneficial bacteria after removing the medicine with fresh carbon.
This is just my opinion, of course.