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Hello and thanks for trusting me to help you and Dickie today. I am a licensed veterinarian with over 30 years of experience and would be happy work with you.
It sounds is if Dickie may have developed a moist dermatitis or what is also referred to as a "hot spot". They occur secondary to a dog itching an area of inflamed skin to the point that it starts to ooze. Many become secondarily infected and lead to the odor you are describing. It also sounds like Dickie may have developed a otitis externa (external ear infection) with possible progression into the middle ear. This is more serious and definitely needs to be addressed or it can lead to complications including loss of hearing. On top of that, they are very painful.
I would strongly urge you to have Dickie examined by your veterinarian. The entire area of the hot spot needs to be shaved so that it can dry out and be treated. A short course of steroids are usually needed to break the itch cycle on these. The ear needs to be evaluated and the proper topical ear medication needs to be prescribed. This is usually based on what organisms are identified from a sample taken from the ear, but also based on the history of what has been used in the past for skin and ear problems. It sounds as if he is definitely a dog affected by skin allergies, and looking at his history will be very useful in formulating a long term plan, but he needs these secondary infections to be cleared up first to give him some relief.
I hope this is helpful. Please let me know if you have ANY other questions. My goal is to give you 100% satisfaction and if you are not yet satisfied, please reply so I can clarify for you.
My posted replies are for general education only and not meant as a diagnosis. Only after a thorough veterinary examination can a diagnosis for your pet be made and specific treatments be advised or medications be prescribed.