It looks like the wood can be removed without disrupting anything. So pull it out, manually remove what algae you can, then boil it for a few minutes to kill the algae's roots before returning it to the tank. If there is still a serious tank issue, it may eventually re-establish itself, but at least it will set it back enough that it will buy you some time; and let you cool off enough that a hammer isn't an attractive option.
I have dwarf sags too. In my experience if they don't receive enough light, the entire plant pales. Not just the tips, which are typically closest to the light. So I don't think too little light is a problem.
Tests can sometimes just be flat out wrong, or seemingly detect nutrient forms which are unusable to plants. When plant symptoms disagree with a test, it's usually best listen to the plants. If you go to 3ml Tropica+ for a couple of weeks and plant condition improves, then not only have you solved a problem, but also have evidence that the test is misleading you. If it doesn't work, then nothing is lost.
You cannot estimate actual light by watts per gallon when using T5 bulbs. That rule is intended only for T8's. T5's are more efficient, and you can achieve high (or excessive) light with far fewer watts. I have a high light 46G with only 78W of T5.
So put WPG completely out of your mind, as it will only serve to confuse you. What's most important with T5 bulbs is the number of bulbs, reflector type and quality,
and distance between bulbs and substrate. Unless I overlooked it, I haven't seen the latter two in this thread or the one you linked, so we can't make a proper estimate of your light levels; but it is indeed possible you have too much light.
