First--you may want to cross post this to the Birth Professionals Forum.
Remember that the skin is a major organ with various important functions--one of those jobs is as part of one's 'waste elimination'. While I can't say for sure based on information present, I do like the pp's explanation--whether it was the pitocin, or other drugs used during birth and early pp time, or intensive use of herbs/supplements, or even just normal pregnancy/birth hormones, it seems very logical to me that your rash was a result of your body working to flush out wastes. In some cases, such 'flushing rashes' are not itchy, just ugly. But, depending both on what is coming out, and how sensitive your skin is at the time, there can be itching, weeping, burning of such a rash.
Most women, in the days following birth, undergo pretty significant flushing of their systems--they pee a LOT, some sweat a lot, or both. You are releasing the extra water (plasma) that your blood developed for pregnancy purposes that is no longer needed--returning to your normal blood volume fairly rapidly. Even without any drugs or high doses of herbs/supplements, your body is also releasing hormones and other biochemical factors of pregnancy that are no longer functional now that baby is out (stuff that is now 'waste').
My usual method for coping with any rash that becomes a problem (whether it's from waste flushing, poison ivy, pregnancy related or not) is to use water....hot and cold rinses, and to avoid lotions/topicals of any kind. Hot water opens the pores and helps hasten flushing. Hot water (as hot as you can take it without burning yourself) also produces this curious effect--first, it greatly increases the itch, while simultaneously scratching the itch in a way. It is one of those amazing awful/wonderful sensations that is hard to describe but I know others who've felt it...Anyway....Cold water after hot, helps rinse the skin thoroughly and then chill out the itching for a time, as a comfort measure. This method will tell you pretty fast if it's the right one or not--it will either start to help clear the rash in a day or so, or it won't. In the meantime, it won't do any harm, or put anything into your milk--and it won't clog pores that are working to stay open for this flushing process.
I will say that with poison ivy, it first tends to bring on the rash worse for a day or 2 (tho the cold water still helps quell itch), then soon to dry it out fast. It's the fastest method I've found for clearing poison ivy and other 'contact dermatitis' rashes from plants (My skin is pretty sensitive but I love the outdoors, I can't take steroids, have had MASSIVE cases of poison ivy in my day, and have tried a LOT of remedies). I do know other poison ivy sufferers who also stumbled onto this remedy as accidentally as I did...and I have applied this to other kinds of rashes, to bug bites--anything where there is a skin problem related to the presence of a toxin/waste product that needs to come out.
Well, this is just my theory--I have not yet heard of this type of rash in connection with post-birthing time nor of any ways to cope with it. But while steroids may have their place, it's definitely not the first thing I'd reach for! I'd be glad to hear of anyone else's thoughts/info on this topic.