I have tried to look for chemical or elemental analysis of the UCSB lagoon water but have not found any good data to actually answer your question.

I have often felt that the lagoon is both underappreciated and understudied. I agree with you that the high salt levels in the water would definitely have a profound effect on growth of your seeds. Any changes in osmotic balance between the seeds, roots and their environment will effect both germination and growth rates. The offensive smell that you described is most likely sulfur which is generated by bacteria in anoxic, low oxygen, environments. This chemical could be inhibiting germination.

In my search I also found that UCSB has been using a larval pesticide in the lagoon in order to attempt to combat the breeding of mosquitoes in the stagnant waters. Maybe this is having an effect on your lettuce? If you or your students are studying chemistry next, there are some relatively cheap chemical analysis kits for water quality that would be fun to use to test the lagoon and would tie in nicely biology with chemistry...interdisciplinary is where it is at these days.