I do basically the same thing, with seperating the stages. I dont have an easy answer for the dead ones, I just hand pick them out. As far as the skins, I just dont worry about them. I've been considering taking some eggcrate (the light difusing grid, not egg flats) and putting some window screen over it, making a small shelf to sit in the tub. I figure if you pour out the worms after sifting on top of it, the live worm will crawl off, and whatever is left on top of it after a while can be removed and thrown out. I know thats probably totally over kill, but I enjoy odd projects like that. With me its not as much about why, as why not and will it work.