Most rashes are caused from the inside out. She is likely allergic to something that she is consuming. Many babies have reactions to casein (milk protein) and if they are breastfed, it could be that or something else in her diet.
My daughter's reaction to dairy in my diet was this:
Diaper rash that looked like cigarette burns
Foamy, mucous-like poops, sometimes bright green or streaky
Spitting up
She reacted to these other things I ate with fussiness and the rash:
onions
spinach (the #1 veggie allergy- who knew!)
citrus (orange juice, tomatoes, etc)
sweet potatoes and pumpkin
I would get her off of dairy for at least a month. We saw some immediate improvement, but if I would even LICK my finger - just that much dairy would send her over the edge again :( Some babies are more sensitive than others. Dairy is hidden in a lot of processed foods, so be very careful if you are nursing.
In the meantime, if you are breastfeeding, you can squirt your milk on her diaper rash and that should help too- it's antibacterial. Plain extra-virgin coconut oil or Calendula oil or lotion (Weleda is a good brand- try the health food stores for this and the coconut oil) will help too.
M.