LovNKyra, first off, hugz to you and your girl, the photo of her broke my heart, seems a lot of Pitties have skin 'issues', i am so sorry your girl is plagued with them.
my girl had sensitivities to corn and wheat that caused her to get hotspots and itch like crazy, i put her on the same food my Dobes are on, Purina Pro Plan salmon and rice and she never had anymore issues, though if she gets too many dog treats with wheat in them she will srcatch a bit.
when your Vet saw her did he do any blood tests to check her liver, kidney, thyroid, hormone levels, etc. ?
as to any of the herbal nervines helping..........is she a 'nervous' girl, does she have any anxiety issues?
as to a change in diet helping......sometimes it can take 3 to 6 months before the symptoms improve and or diminish.
the flaking skin now may be due to her skin healing and sloughing off the old/sick tissue, this in itself may be making her itchy too.
i do not like bathing a dog unless it is absolutely needed, it tends to wash off any natural oils that help protect the skin..............but, if you do need to bath her, use as little 'soap' as possible, preferably a natural one like Dr. Bronners liquid castile soap.
Lavender essential oil is very soothing for skin that is red, it will cool the skin as well as discouraging mites. You could try a few drops in a couple of cups of warm water and apply to her skin to help relieve the pain and heat of her skin. It will not hurt her if she licks it off either.
Another thing......sulphur remedies were used for years to treat skin issues ......some drug stores carry flower of sulphur, here is some info. on it.............http://knol.google.com/k/valerie-luk...ofq5cvpk6yl/1#
also............if you can find a supplement that has a lot of MSM (it is a form of dietary sulphur) in it, it will really help her a lot too. http://www.naturodoc.com/library/med...background.htm