This photo was submitted by a breeder who lost all the chicks in one clutch within the first three days of hatching. A subsequent clutch did not have the black spot and no deaths.
Neonatal Black Spot
Death in nestlings less than five days old, with an enlarged gall bladder appearing as a black spot on the right side of the abdomen, is most likely due to a viral infection with a single stranded DNA virus known as circovirus. Weak chicks that fail to beg for food and show the black spot may appear in nestlings as young as one day old. It is more common in the first and third clutches.
The canary circovirus, known as CaCV is transmitted by "carrier" birds and can be found worldwide. Circovirus, although a different virus, belongs to the same genera of circovirus that cause psittacine beak and feather disease but CaCV is species specific for canaries.
Circovirus in passerine birds was first documented in 1995. It is highly contagious and difficult to kill even with disinfectants and can survive on surfaces for up to six months. Breeding with identified known carriers should be discontinued and the aviary thoroughly cleaned.
Like other virus diseases it is unaffected by treatment with antibiotics. Careful records and selective breeding of birds free from this problem is critical. Working with an avian vet, diagnosis can be confirmed by necropsy or by PCR (polymerase chain reaction) testing for the virus in questionable carriers. Keeping birds free from other diseases will help control the problem. A vaccine is being developed.
Although I have not used Dr. Rob Marshall's KD powder (google for source), theoretically it could help protect healthy members of the flock and strengthen the flock's natural resistance.