Thousands of Tiny Red Worms???

Please help to solve a mystery. Last year we had a garden full of young healthy pepper, tomato, and cucumber plants until we applied compost from our Compost Tumblers. We noticed the compost was filled with inch-long, tiny needle-like red worms. Within a few days of applying the compost the plants in the back of the beds began to fail, wither and die. Moving forward through the garden, row by row, all the plants began to wither and then die. We pulled one of the withering plants out, cut into the stem to look for bugs but found nothing eating the roots or stems. My husband says there will be no garden this year unless we can find out what killed last years plants. My guess is the worms but we thought the worms were a sign of healthy compost.