@ Naomi: It smells 'weird' and it makes the incubator smell weird. This happened to another of the duck eggs I had, but in that case the lining actually glued to the chick and felt like a hard candy coating to the touch! It was so terrible! I had to soak it and rub off the membrane slowly with q-tips many times, and the duckling had to have several warm baths before the gunk (mostly) came off. I think wrapping it in the wet paper towel this time has helped, though. The bleeding stopped... I think. I mean, it wasn't flowing when I picked it up to look, but it had soaked into the paper towel and there was way more than I liked seeing. At LEAST 10-12 drops of it. I just felt sick seeing it.
@ Cat: I don't know WHAT causes this but I hope I never have to see it again after this. I am bleaching the feck out of this incubator once these peachicks and ducklings are out in a couple days... Will probably dry it, bake it in my car, and bleach it again just to be sure.... and someone recommended using peroxide for humidity over plain water... yep, sounds good after this!
EDIT: As of bedtime... He's still hanging in there, breathing and resting. I haven't heard peeping from him in a while, but it's hard to tell with the peachick that just hatched showing the world how big her lungs are.