i don't think water supplies add anything like Nitrites to water, so that is just the signs of the nitrogen cycle finishing (if ammonia is 0 now). The last of the Nitrite spike is being converted into NO3 right now.
As for NO3, just let the cycle finish out, and re-access after. Seems a little high with only having small fish, which would lead me to think Testkit malfunction. Have you tested it on your tap water as well? I can't imagine cities adding that high of NO3.
450g Planted Discus Tank - Work in Process!