Hi and welcome to YT

.
I have a lot of experience w/ itching dogs and allergy dogs, so I understand the frustration.
Yup, your vet should never, ever have given an antibiotic to treat yeast - good lordie! That just causes more yeast overgrowth in the small intestine, for petes sake! How incredibly odd. I guess my first advice would be to find another vet asap, one who understands allergies and what antibiotics are for (um, bacteria).
To answer your specific questions:
1) Yes, he is itching too much...esp when he chews/licks his paws and he has broken skin at the muzzle before; this affects his quality of life so I wouldn't leave it be, not at all.
2) I have pretty much tried everything and nope, nothing holistic worked at all.
3) Benadryl rarely (almost never) helps allergy dogs but if yours is one who it does help, then yes, give it. I'd give him the pill form w/ some peanut butter or cheese. The issue w/ Benadryl is that you must give it every 4-6 hours bc it has such a short half-life. 24-hr allergy meds for dogs include Zyrtec or Claritin...those too very rarely work.
If this is systemic yeast, then you treat w/ Diflucan, Nystatin, or similar x at least 2-6 weeks. If this is allergies, then you have to figure out if it's year round or seasonal. If year round, then Atopica or Apoquel are just excellent (miracles for most allergy dogs!). If seasonal, you may be able to treat w/ Temaril-P, steroid, etc.
My very best advice for what I think is a case involving multiple things going on here, possibly w/ both yeast and allergies...? Forget going to your generalist vet over and over and over, spending all that money -- and instead see a Vet Derm and get squared away immediately by a skilled, specialized clinician. Sure WISH I would've done that from the get go!
More about allergies here (and see Vet Derm locator at bottom):
http://www.yorkietalk.com/forums/die...tart-here.html