We'll I have some experiences as with DIY co2 bottle system with yeast and sugar plus warm water. I believed I've seen the Hagen kit before and the bottle is quite small. Most DIY people using yeast and sugar and warm water use 2L Soda bottles, some use a few of these bottles together to produce more co2 for their bigger size tanks.
The part with your water being cloudy, could be a mixture to water ratio that over bubbled and went into your aquarium. If your fish are gasping within minutes of it setting up, the solution somehow manage to raise up through the tubing and into your tank. This happened to me once so I know.
Search some DIY Co2 system on here, there's plently of them listed and people uses different type of sugar also, brown sugar seem to last longer. And different type of yeast bought also last longer too.
Not my photo but here's a setup.
Back in the days, I had myself one of these system. It's very similar to yours. Small bottle consider to a 2L soda bottle, co2 mixture given inside bottles. Exception, mines comes with a small power head. I still today use that power head, but I junk the rest of the bottles and everything else. I no longer use any form of yeast and sugar mixture anymore. But I recalled having once, having the mixture solution shoot through the tubing into the power head and clouded my entire tank up also. I couldn't remember if it killed off any fish. Back in the days, I had hundreds of different type of fish along the years so I forgot what died or not.