No idea if this is a possibility, but you did say his little scalp was getting flaky again.... maybe if it's itchy, you could moisturize it? My daughter was relatively bald (and had cradle cap, too), so we slathered her little melon with lotion pretty regularly (after every bath, which was every few days). Since we put it on at night, by the time she got up, her hair didn't look greasy or anything (I was always surprised by that, but baby fuzz is impressive stuff, haha). We did this during her cradle cap days (which were over by 5 months old or so) and then well after, until we quit lotioning her up as much (at ~12-13 months).
Anyway, I don't know if he is trying to scratch or if he just happens.... but that was just my first thought.... And it may be less feasible to try, depending on your little one's hair and scalp....
Well, I hope you get it all figured out soon!
Oh, I also thought about this: about 5-10 minutes before her bath (which we did every night while we got rid of the cradle cap), we put mineral oil on her scalp and eyebrows (yep, she had cradle cap there, too). Then, during her baths, I used a separate washcloth than the one for the rest of her body and wiped over the cradle cap areas (not rough or anything, but with a little more concentration than the rest of her body). The cradle cap was gone pretty quickly (1.5 weeks or so). Anyway, the reason I am bothering to say this is that I think this helped keep my little one's head even better moisturized...
Whatever route you take, good luck to you and your fellah!! :)