Thanks, Sandra and Jackie! I think we really may have something here. Since the day I found him at the shelter, he has been having immune system problems. This could be one more. I read over the "eosinophyllic gingivitis" prognosis and I think that maybe he may have also had this lip fold pyoderma problem, too. Every time he had his teeth pulled (all six of them) they cleaned up his folds, too. I wonder why they didn't think of this problem with his lips to be related. I know his liver disease can't control bacteria so that's why it can run rampant. I've been checking his lips and I think we're going to visit the vet to see if he has this. Someone mentioned something about crusty lips on the GSD BB during the Christmas holidays and it just didn't register with my brain at the time because I was only cursory checking the messages, but then Killian's lips are getting crusty and his breath is starting up again and 2 + 2 must be adding up! The "several underlying causes" may be adding up to this or it may be one of the "many underlying causes." This is really something I have to look into. I'm going to check the GSD BB and e-mail the person who mentioned this condition!
Thank you so much for the info. I think Killi really may have this or a form of something like this.

Love and slurps (ok, we'll hold the slurps 'cause of the lip thing ha!) Killian and Sue