Dean;

2 questions: 1) Are you getting alot of undesirable algae, like slime? 2)Are you using tap water or R.O./D.I. water for your tank? If you're using tap water, that's part of the problem, I bet. If you're not getting any algae, I wonder why not? Usually with high nitrates you'll have algae blooms. Since your tank is a little too small for a deep sand bed, I'd try setting up a caulerpa and/or xenia refugium, the bigger the better. That's a good long term solution, but it's going to take some time and, of course extra room and some money. Your soft corals, if they're healthy, will actually help to lower nitrates a bit. I'd do a couple of big water changes, like 50%, if your nitrates are really high. I'd also check with a different test kit. Probably the filters you were told not to remove are the biowheels that Chris is talking about. It is true that they can contribute to higher nitrates, but it sounds like you have sufficient live rock and enough sand to have some anerobic areas. The deal with the bacteria is that there are two kinds (sort of) one lives in areas of high oxygen, like on the biowheels, and converts ammonia to nitrite, then to nitrate (actually two different bacteria strains) The other important bacteria live in areas of low oxygen, like deep in the pores of the rock and down in the sand, and these convert nitrate to free nitrogen, which then bubbles out of your tank. Are you seeing any bubbles on the sandbed? In a small system, or with sand that's too coarse, it's tough to keep enough of these bacteria alive to reduce nitrates effectively. The caulerpa refugium will allow you to grow caulerpa algae which will take up nitrates by growing, then you periodically harvest away the excess caulerpa. But it takes a lot to really reduce nitrates. Xenia does a good job of this too, but you need higher light in the refugim to grow it.

hope this helps
Matt