Poor Oliver!
After he poops and you have cleaned his bottom, can you keep the diaper off, not put on any ointment, and for a few minutes lay him on a towel on the floor or let him sit on your lap with his bottom facing away from you? This will allow his bottom to dry out and help the diaper rash heal.
Also, have you tried Triple Paste? It's my understanding that this is better for very bad rashes than Desitin.
Lastly, do you know the cause of the diarrhea? Is it because of an antibiotic? If so, do you give him yogurt with acidophilus? This may help restore his normal gut flora (but some diarrhea caused by stuff other than antibiotics can get worse with dairy).
I agree with Music-Dad that you might consider calling his doc. Waking up screaming 4 times sounds miserable for him and you. Maybe your doc can have some better suggestions.
Get better soon, Oliver!