I've had it happen too. recently in fact. It got off to a bad start, and probably won't recover. It's funny because you get so used to doing clones, you forget little things like this when you start something new from seed.
Most of this is old news, but I'll recap anyway. For future reference, start seeds off in semi wet soil, only hydrating the top area until successful germination. Ventilate the area so you don't get moldy. The plant isn't using much water right now, so it's up to you to keep the dirt conditions ideal. You can run into problems like this too, if you planted the seed too deep. They almost don't even need to be covered up for ideal germination.
Again, some of this you may already know, but I'm not sure what your skill level is. Also, you could just have yourself a runt, in which case it may not be worth the effort.
