OK, so I'm now less concerned about fresh coffee grounds throwing off the PH and/or banana peels rotting your stem/roots and I'm leaning to the over-watering, especially with your agreement that it's probable.
It's a common thing since, as "growers" we like to "baby our babies" but the truth is, the plant is going to do everything it can to survive without us and, in the beginning it doesn't need much.
Once the germination process starts, it triggers a chemical reaction for the plant to start growing and it really doesn't need much water, it just needs that the roots don't dry out completely. And, in the early stages, the plant doesn't have much roots to uptake much water, so if the soil is too moist it creates an "anaerobic" environment and pythium (root rot) will set in. The roots need air as much as they need water.
I would do what you can to help the soil dry out and don't water again until the soil on top starts looking dry. Also, make sure you have good drainage in the BOTTOMS of a soil container. Don't try to make it like a hempy with drainage on the sides and a res at the bottom.
I hope that helps!
