Just in case anyone is going through the same thing, my DD had extremely dry skin in the creases at the front of her legs/top of her feet. It would dry and flake and crack and bleed and it didn't help when she discovered she could scratch it! This went on from 3mnth to about 6mnths of age.
We tried sorbolene, fragrance-free washes & moisturisers and even zinc-based nappy rash cream but nothing would clear it up. Then we tried tea-tree oil and it worked brilliantly. She is now completely healed - the difference is amazing.