Go to a vet, in fact go to an emergency veterinary hospital right now.
It sounds a bit like advanced scabies to me. I don't have any idea what the time for disease progression is with it since I've only ever seen wild animals (coyotes) that have gotten to the point that their whole body is involved and they don't have any fur left. Definitely talk to another vet if this one can't come up with a definitive diagnosis, and bear in mind that it might take a specialist to be able to come up with an effective treatment.
In some cases, steroids may be the only effective treatment, and if the dog can live with the side effects then it might be the best you can do.
I had the same problem my vet told me to put omega three fish oil in his food get the gel cap poke a hole and put it on dry dog food it dose wonders for there skin you can pick it up at your local supper market its safe cheap easy and very effective good luck it worked for my bosten terrier I hope it works for you aslo you may try soaking him in a sulfadaine shampoo let him soak for twenty minutes then let him eat the fish oil food if hes not better in a few days you can take him to the vet they may want to give him allergy shots or some other kind of medication what ever it is iam sure theres a cure I know your worried and you love your pet please ignore the rude comments made by others they are ignorant and don't know anything my best wishes to you and your pet.
My family and I moved from the midwest to the southern U.S. A few years ago, and in this area there were a lot of dogs with this type of skin issue. When my sons dog developed this they took him to the vet he had special soap, medicine nothing worked, then his neighbor say's why don't you do what we do.
This remedy sounded so odd but nothing else worked so he reluctantly tried it with great results.. it really worked it was sounds crazy but used not new used car motor oil rubbed on the skin, try it on a small area if your reluctant but it really does work.
If you don't have any information to help me I don't want to hear from you.
There are some great things I read about it and you can get the acv free online.
I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.