I don't have a solution for you, I just wanted to empathise. Zevulun is also a rashy baby. We worked out that it's a breathability issue primarily. Too much PUL or disposables (more than one in a row) and he's red. Also disposable wipes, no matter how sensitive they claim to be. He can get red from wetness but not as bad as the other issues. He's primarily in fitteds with wool (or coverless), with a fleece or suedecloth liner. Cloth wipes with plain water. It's the only thing we can use to keep the rash away. We have to take 3 1/2 days worth with us to NY in a couple of weeks (religious holidays mean we will have at least one stretch of 3 days in which we can't wash) but it's worth it for his comfort (and that doesn't include Immanuel, he'll have to be in partly sposies because I can't take 50 nappies with me!).
Anyway, good luck in working out what Kai's problem is. It's so hard to see them going through that and feel partly responsible
It's really worth persevering. We did have to buy a whole new stash for him but it's worth it.
--Rodent