I have had thrush both on my nipples as well as under/around my breasts. Thankfully, the 2 never decided to occur at the same time. You may be doing yourself more trouble by washing your breasts prior to nursing. Nystatin, while not delicious, is not dangerous to be consumed in small amounts (even in the petroleum based ointment), and washing removes the medication, which will then require reapplication each time. There is a liquid Nystatin used for treating thrush in the mouth.
Some things that work well to get rid of yeast:
-Regular washing and keeping the area dry.
-Application of diluted Grape fruit seed extract. Dilute a few drops as directed on packaging, then apply to skin with fresh, clean cotton ball or cotton pad, at least twice daily, occasionally more.
-Miconazole or clotrimazole. These can be picked up otc as vaginal yeast creams. Apply as directed on packaging, usually twice a day. I do not usually bother with Nystatin, as I find it isn't very effective and takes too long to begin working.
- Increase probiotic use. This includes yogurt as well as possibly using acidophulis pills or keifer. It is important to note that yogurt that contains HFCS is not as effective as natural brands that do not contain it. I have taken as much as 30 billion live cultures of probiotics at a time with minimal effect. However, usual dosage is around 1-3 million cultures a day. You can pick these up pretty much anywhere, including Wal-Mart. Over use can cause diarrhea/relieve constipation, so do start dosing slowly.
-Diet changes that can also help include eliminating processed sugars, wheat (especially white) and yeast. Eliminating high sugar fruits (bananas, oranges) and getting rid of juices in your diet. I only go this route as a last resort, but have limited my diet when treating yeast.
So, to break that all down for you, when I have yeast, I wash my breasts both morning and night (not always in the shower if I don't have time). I then dry thoroughly, and wipe on the grape fruit seed extract. After that is dry, I apply the miconazole/clotrimazole. In the middle of the day, I often take a few minutes to dry my breasts (my yeast occurs frequently in the summer when I am sweaty) and apply more grape fruit seed extract. As part of my meals, I take the probiotics. I try to eat yogurt in the morning (at least a spoonful), and limit sugars.
Much luck, and it will get better.