It doesn't sound like yeast, but more like a reaction to the acid content in his stool(from both the location and color). I have used Hyland's Diaper Rash cream with amazing success. Give it a try . . and you might want to try using cold cream on a cloth to clean his bottom while it is so red. It will help it to heal faster, as will allowing him to "air out" a bit!
mom to Greta 3/14/02