Oh, your poor baby
! Before going into some thoughts - has she had any bloodwork?
Has she had a skin scraping (and then looked at immed. under scope)?
Has her skin been cultured (grown out in culture for 10-14 days)?
Has she been put on Simplicef?
Has she seen a Vet Dermatologist yet?
This looks like pyoderma to me, first off...but I have more thoughts on this. I will probably post more tomorrow (sorry, I have some things I must get done yet tonight)...but knowing a few more things might be helpful.