I can't believe your vet didn't recommend dips right away knowing it was demodectic mange. our yorkie scratched all of her fur off due to being misdiagnosed and within two weeks after the first dip she was growing hair back. I believe the dip was mitaban.. but not sure on that.. Make the vet show you the skin sample under the microscope. If he/she finds little cigar shaped creatures make them show them to you. If they don't find them within a few scrapes than it isn't demodectic mange. again i state MAKE them show you so that you know you are treating the right problem. 
maybe the dip was called ivermectin or mitaban.... She was also on a liquid called ivachol which really helped with her skin infection ETC.. I encourage you to look at my thread below and definatly my last post with pictures of how well kate is doing now. I wish you the best and trust me we know how you feel. no matter what anyone tells you get that dog dipped. Then get her dipped again in two weeks and two weeks after that and two weeks after that. I would do it 3 time more than you think is necessary.  
here is the thread about my dog 
http://www.yorkietalk.com/forums/sic...in-issues.html