Dr. Smiths diaper cream is a great product. My son's butt was so sensitive he could go from baby smooth to bleeding rash in one diaper.
I would buy an over the counter anti-fungal cream for athletes foot and put that on first and then literally paint his butt in a thick, very thick coat of Dr. Smith's. It is a white and think cream.
Destin broke my son's butt out in hives and he ended up with a MRSA infection (a huge boil) that had to be lanced and drained.
I even made my own diaper wipes...cut a roll of super soft cotton paper towels in half put them in a plastic container with 2 cups of distilled water, a couple tablespoons of baby wash, a tablespoon of baby oil, and three drops of tea tree oil. (mix all the wet ingredients well before pouring over paper towels). Cut an "x" in the lid of the container and pulled the towels through.
And yes, the formula could be the problem. One of my friends ended up on Good Hearts or something like that formula because it is already partly digested. One friend rice formula. another friend soy...it was trial and error.
Oh and don't let the breastfeeding comments get to you!! As long as the baby is fed it is all good. I had breastfeeding mom friends with kids who were allergic to things they were eating and it took them trial and error to cut stuff out of their diets.
Good luck!!