I'd also suggest that you limit the amount of fussing you do with the rash - bathe in water only, and no more than once a day, preferably even every 3 days or more til he gets stinky (depending on how hot/sweaty it is now where you live). no lotions, no creams, etc - if you must then make sure they're scent-free, dye-free sensitive or baby formulations. many skin problems actually get worse the more we mess with them, because we're agitating the skin. (Speaking as a life-long sufferer of acne and eczema - the best thing i can do for my skin is, literally, NOTHING.)
and as PP said: make sure you're using scent-free, dye-free detergent, no softener, and all that.
Nursing, pumping, cloth-diapering, babywearing, working professor mama with the awesomest SAHD ever.
Have you ruled out a yeast infection? My little guy had a rash that sounds similar to what you described along his diaper line that turned out to be a yeast infection that because of how heavily clothed my mother and mother in law kept him while they watched him started to spread up him stomach. If he is showing any signs of thrush at all it could be that, if there's any milk caught in his neck folds that could easily cause a yeast infection.
My pediatrician told me to just use an over the counter cream and it cleared up in 48 hours, and then I had a serious talk with everyone about how dressed he really needs to be.
Just wanted to thank everyone who replied! We switched from ALL Free and Clear to Dreft And his rash cleared up immediately. I'm so grateful it wasn't something I was eating! I was so quick to think my milk was flawed.. Thanks again for the suggestions and support :-)