Finding the soil soggy in the bottom is enough to explain the curling and purpling.
There is so much variation in starter soil water retention. I found peaty mixes to be way too good at holding the moisture in my cold seed starting environment. Seedlings were unhappy all the time, because the peaty stuff didn't dry out nicely and there was always more moisture than they needed to transpire or use.
OTOH you may help it a bit by making bigger drainage holes in your cups. Pooling at the bottom is a sign it is just not draining out as it should.
Hard water can have effects, but I wouldn't expect to see that at seedling stage, only in pots that have been watered for a whole season or more. And your seedlings were okay last year so it is probably not a factor.
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