Hello, I'm Dr. Deb and will do my best to help you today.
I'm sorry for this concern for Jazz. It sounds as if he may be developing a hot spot or what's also known as Moist Dermatitis. These sorts of lesions are commonly seen in this location and while we think they may be related to allergies in some dogs, for others we don't have a good explanation as to why the patient will self-traumatize their skin.
But, regardless, I do have a few suggestions which may be of help:
1. First, I'd trim away even more hair as possible around where he's been chewing to expose the skin. You may be surprised how extensive an area is involved once you start trimming.
If you have mustache clippers or regular ones, they'd be perfect for this job.
Just take care since this area could be quite painful for him; I wouldn't want you to become injured if this is the case so having someone restrain his head may be necessary.
2. Then, I'd gently clean the area twice a day with dilute over the counter Betadine or Iodine (to the color of weak tea).
If you have something with Chlorohexiderm in it such as Hebiclens, that would also be acceptable.
3. I'd then apply a small amount of over the counter cortisone ointment which can help to reduce inflammation and soothe the skin.
4. If the area also looks really oozy or pusy, then I'd also apply a small amount of antibacterial ointment or cream such as you'd use on a wound for yourself.
5. A perfect product for this sort of skin issue would be Vetericyn spray which may be available at local pet or grain stores. I know it can be purchased online but this won't help you now unless it's shipped overnight.
6. If he's not currently taking any non-steroidal anti-inflammatory or steroid drugs nor vomiting, then he could be given Aspirin at a dose of 10 mg per pound of body weight twice a day, with food to avoid stomach upset if the area looks really red and inflamed. If it doesn't look that bad just yet, then he may not need this drug.
7. I assume that your Benadryl dose is correct but I'll include the one I use which is 1 mg per pound of body weight twice a day.
8. He may need to wear a cone to prevent further damage to the area.
I'd treat as above today and evaluate tomorrow. If the area is worse (which it really shouldn't be) and/or he won't stop biting at it, then a vet visit may be prudent.
I hope this helps. Deb