The Paper Lantern Habaneros that I sowed in January came up much more spindly than yours. I honestly thought they were all doomed to fail... But no. Just persevere, and they should come away. Even if the embryonic leaves are a bit warped, once the plant gets some small true leaves it should take off.
I found that my seedlings sat and did very little in their coir plugs in the propegator. I tried adding a little Chilli Focus (fertiliser) and they put on a growth spurt and developed their true leaves very quickly. I repotted them into individual pots and watered them, and once again they went nuts.
Contrary what I'd read, I don't think those coir plugs have much in the way of nutrients in them. Get some Chilli Focus and start giving the seedlings small amounts. It worked for me.
As for germination issues, it seems that soaking seeds in cold, weak tea for a few hours prior to sowing works wonders. Have a read of this thread:
www.southdevonchillifarm.co.uk/forum/9-g...illies/2058-how-long
It worked for Stef as well (pages four and five).