Hi Wendy,
An initial response to a Blood tonic in a skin case, followed by a worsening again, suggests the next formula needs to address the Spleen. Once the deficiency in Blood was 'topped up', continued use of it rehydrated Damp. The only way we can explain both as present in the same animal is if they were Spleen deficient. Spleen deficiency is the common origin of both problems.
There are several Spleen formulas to choose from for the skin patient. When the inflammation is fairly significant (creating ulceration) and the pulse is superficial and slippery, then Si Miao San is not a bad thing to try next. To avoid drying the patient out again, you could try adding about 20g of Dang Gui to SMS. To start with, though, you could just get going with the formula with no additions, and confirm the thinking is correct. If we're on the right track, you'll see some improvements over the next couple of weeks.
Hope that helps!
Steve