Have you tried Neocate?
My DD did not tolerate soy or dairy and her bottom looked EXACTLY like you described until she was on Neocate for 3 weeks. It is an amino-acid based formula for children who have food intolerances. They are not allergies and would not show up in allergy testing. (They are non IgE mediated.)
It's expensive, but has been totally worth it. My DD (now 16 months) is thriving--though we still use Neocate Junior for overall nutrition.
What other symptoms is she having?
You asked what her other symptoms were---she has had a lot.
Screaming Spellsnot colicscreaming in agony for 45 minutes or more and then it stops as suddenly as it startedno rhyme or reason to them.
Distended Stomachshe usually has an inny belly button, but it has become an outy most of the time.
Severe watery diarrhea10 to more times a day for a long timehere lately up to 5.
Dropped from 25% to 5th %
I started asking about her pooping when she was just a few months old. I nursed her until 9mths, but she never stopped having the newborn diapers (amount). They never changed consistency, color, or amount. Because she was gainingeven how tiny it was our doctor did not want to send her elsewhere. When we started formula we thought things would change, but they didnt. Still the same amount, but now just more watery. At her year checkup I asked again, but she had grown a tiny bit so the answer was lets wait and seeshe is getting nutrition. In October when she was 13mths we had an ecoli problem in the waterwe gave her bottled, but during bath time she would get some in her mouth. The problem got worse and she stopped eating or eating very little. They tested her for everything and said to get off milk until she was better. All tests came back negative. We put her on rice milk and the diarrhea did not get better, but we realized her butt improved greatly. Her bottom had looked like someone took a meat clever to. It was her cheeks up to her diaper line. It was always bleeding and itchy. This now was gone. She did still get some major diaper rashes and if you changed brands of wipes her skin would bleed. Well in Feb. the diarrhea got worse again and our Dr. finally said it was time to go elsewhere. Our Ped. Gastro. said that she is very sick, but just does not know what it is. We do know it is not Toddler Diarrhea or IBS. They are doing a poop culture for fat, protein, and PH levels. At times her butt looks like someone has just poured acid all over it. It can happen in matter of seconds. She will look great on the bottom and then have one bad diapershe lets you know quickly or you can smell the horrible smellby the time you change it she is already raw and bleeding. You can only imagine what it is like when she has 10 a day. This is different than the other bottom issue that I mentioned above. In March this one came back and as of yesterday it is finally starting to clear up.
Hopefully by the end of next week we will have some answers.