It sounds like a yeast infection. Very common and hard to get rid of. Make sure he is eating yogurt with live cultures/taking a probiotic and/or taking acidolphilus (spelling). You can find the probiotic and acidoplpilus at a health food store, actually I think Target even has both now. Aside from that, lots of air time and an ointment we had success with is Lanoish (the stuff in the purple tube that is sold in the bottle aisle of Target meant for Momma's sore nipples while nursing) works great on rashes, dry skin, chapped lips, etc.. I know you went to the Dr. but if all he/she did was hand you some samples of a new medicine then check out www.askdrsears.com they have a rash section with pictures and recommendations.
Best wishes,
M.