Labrador Puppy with Fungal Infection

Question
Hi,

I was recently given a Labrador puppy (female, 6 weeks old) by someone, and she had a weird scabby look to the tips of her ears. When I took her to my vet for a general check-up, he said it was fungal. I'm using the medicine he prescribed, but am not happy with some answers (lack thereof) and before I head to a different vet in person (for a second opinion) I wanted to ask you as well.

History:
She's 6 weeks, has had her first combined vaccine, and while her papers said she was dewormed I could see worms in her stool so I had that done again.

The skin issue is on the edges of her ears, but now spreading to the ear flap (inside) in the form of waxy looking pustules. She also has the same scabby/flaky look on the edge of her tail.

We live in Pakistan (Islamabad) and the weather is cooler here now (in case this helps you).

What the Vet Prescribed:

He said it's fungal, although no tests were done. He diagnosed her by looking at her.

He gave me the following medication for her, after having given her a 3-day course of antibiotic shots as well as using sulphur on her ears (cream) in the days I took her in for her shots.

Now I'm giving her:

Lamisil Tablets (Broad spectrum Anti-fungal) (for 10 days)
- 125 mg, divided into two doses every day

Lamisil Cream (Broad spectrum Anti-fungal) (for 15 days)
Once every day, on the affected areas

Klaracid Syrup (for 5 days)
Twice a day, 2ml each time.

After 10 days, she has a follow-up check-up. I've been giving her these medicines for 48 hours and have noticed no improvement, in fact the flaps now have more pustules on the inside. I'm supposed to give her the medicines for 7 days after the symptoms stop.

Contagious?
The vet said I should keep her away from my older Labrador female, who is 1.5 years old. She is completely healthy. The kennel she lives in is also completely clean. I was initially ok with this as I didn't want her to get this as well, but I've heard fungal infections are only contagious to people who have compromised immune systems (kids, elderly) and I've kept the puppy away from them. But is it necessary to keep her away from the adult dog too? She keeps going to the older dogs kennel to sniff her, and I want to know how worried I should be about that.

So basically, I would really appreciate if you could shed light on a few things.

1. Fungal infection or not?
2. Contagious or not?
3. Why is it still acting up if I'm giving her the medicine?
4. If this is fungal, how worried should I be about it flaring up again?

Thanks!
Nida

Answer
Without some testing, like a fungal culture or a skin cytology, it is hard for me to tell you if it is fungal or  not.  If it is a dermatophyte, it can take 2-3 weeks for resolution of the lesions with medicine.  The ringworm fungi die slowly and after they are gone, the skin needs a chance to heal and remove the dead surface cells. That can take 21 days.  Some of the ringworm infections are contagious and that is why a culture would be helpful to know which fungus is causing the problem.  Most fungal infections in pups are derived from fungi found in the the soil, so if the puppy is in a clean environment, then it is unlikely that it will return.