M.K.
Is it possible it's a yeast infection or some type of dermatitis caused by the wetness in the diaper area? Here's what I would use (this recipe came from a pediatric gastrointerologist we used for severe reflux issues)--mix equal parts lotrimin (women's version if you can find it, otherwise from the antifungal foot stuff), desitin original, and 1% hydrocortizone cream...coat booty liberally at every diaper change, continue use for 1 week once all signs of rash are gone.
the reason hydrocortizone alone isn't working is that it's not creating a barrier like rash cream does, it's just absorbed into the skin, making it hold MORE moisure.