To expand on what Kfmar posted, tapeworm segments being shed will appear like grains of rice. Dogs get tapeworms by ingesting the infected flea, or by ingesting flea feces (e.g. licking their fur). You have two options: Go to a Vet and get a shot that will kill the tapeworms. Or attempt to treat by purchasing Panacur off the Internet.

It sounds like the skin problem is flea allergy related. If you do not have the dog on a Proban containing product such as Sentinel (heartworm pill), then do so. Frontline is limited in its ability to protect the dog.

You should also not rule out a thyroid problem. Have a blood panel run.