I would be putting her on some probiotic 'friendly bacteria' (baby biotics - avail from health food stores and pharmacies). It comes in a powder from and you can just add some to her milk.
Skin conditions such as this usually are a sign of something going on inside - usually with the digestive tract. The skin is the largest organ of elimination, and irritation can be a sign that the internal organs of elimination (liver, kidneys, bowel etc) are not functioning optimally.
For topical use, have you tried Miessence babycare? This is a certified organic range - brands such as Natural Instinct are not certified organic and they still contain some irritating chemicals. Any brand can advertise as being 'organic' - even when they are not. There is no current law which governs this. If you want a product that is truely organic, you need to look for the certifying logo from an established certifying association, such as NAASA, ACO or BFA. The Miessence babycare range is available from the bellybelly online store.

HTH! XX