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Still not a good idea. Melev ending up losing both of his seahorses to a nasty case of tail rot. The one lost over 1/2 it's tail before the ordeal was over. Most likely caused by the stress of the small environment or from being stung by the corals they were housed with.
The next size seahorse...
Nope, not a good idea. Either the corals or the gobies will kill the dwarf seahorses, just a matter of which gets them first.
Not to mention the fact that you would never find a dwarf seahorse in that tank. They are smaller than your clown goby when full grown.
These are not live rock. It is dried out base rock that makes great filler pieces for a reef tank. Once in your tank they will eventualy become live rock though.
Most folks use it to keep the cost down when setting up a new tank.
According to a search, that pump is rated for 660 gph, your overflow should have no problem keeping up with that.
Is it possible that you have something partially blocking your drain line that is not allowing full water flow through it?
Is it possible that your return pump is pumping more water than your overflow can provide?
How is the water level in the tank itself? Is it rising as the sump level goes down?