I'm not so sure that I would recommend paper towel as an incubating medium. If the egg is in contact with too much water it can cause embryo death fairly easily due to osmotic pressure. The egg has a semi-permeable membrane that allows for water to be transported across it fairly easily from a higher to lower concentration. This might be what is causing your problems with hatching the babies. In essence the babies are weakened by the amount of water that is retained within the egg, and they ultimately don't have the ability to hatch.
I've honestly never seen the egg right after it has been slit because it happens so quickly that the gecko is already poking it's head out by the time I see it hatching.
Here are a couple of pics of siblings hatching.
You can see the first hatchling with it's head poking out in the first pic. I put the container back in the dark for about half an hour and when i took it out again the second gecko had begun to hatch.
I don't want to sound negative, but I'd say that the chances are that it probably won't make it. Best bet though is to leave it alone and let it do it's thing.