First off, make sure your peat moss is 100% fertilizer free, that could be the issue. I know a lot I members here, including myself, swear by Eco earth and use this as their substrate.

Also, start treating his water. The chlorine in city water and even some metals from well tap water can cause your frog to tox out. Your friends frogs may be ok but all frogs are different, and most will suffer. A good brand to use is reptisafe. It also adds small amounts of calcium and other rehydrating electrolytes to the water as well as removing chlorine and trace metals.

Can you post a picture of the enclosure?