Hi, the treatment with the shampoo should help to reduce any yeast overgrowth so it's important to keep that up and make sure the shampoo is left on for the required time before rinsing off. We have been told to bath Lenny once per week to help with his atopy and we use a hairdryer to help to dry him off and warm him up.
I don't think mites themselves have an odour but the infections they cause, as well as yeast infections and bacterial infections can give a distinctive smell. I would work on the basis that if two vets haven't detected mites that it is not the problem at this stage. I'm not sure what test the vet will carry out if the shampoo doesn't work - biopsies are usually carried out to identify the cells in a tumour - but they may want to do a skin scrape to check if there are any parasites. The scooting, scratching and head-shaking just tell you that the dog is itchy and the smell, and the treatment prescribed, suggest that the dog could have a yeast infection which could certainly be the cause of the itchiness. I think the vet is trying to see whether he can bring the yeast infection under control with a shampoo before looking for other causes such as parasites or an underlying allergy.
When it comes to ears, anti-bacterial drops probably won't do anything specific to fight the yeast infection but it is important to keep the ears clean while this problem is around otherwise there is a chance that the ears could develop a bacterial infection as well. The vetzyme drops are described as a cleanser as well, so should help from that point of view although they're more expensive than a standard ear cleaner such as Epi-otic.
If you buy commercial treats and look at the ingredients you will see that most of them list "cereals" and "meat derivatives". That means that you don't know which vegetable and animal proteins they contain. If you suspect a food allergy (although it is not definite that he has an allergy at this stage) then you need to know what proteins he is eating so that you can identify and remove the problem protein(s) from his diet. Sometimes you have to be cruel to be kind and if no treats means less itching it might a good swap! Most dogs will eat raw carrot as a treat and there are a few brands of 100% fish skin treats around now that he could try.
You've not said what food he eats but the trouble with some of the cheaper foods is that they contain a lot of cereals and other ingredients that are potential allergens. You need to find something with a limited number of proteins - preferably new to the dog but as you don't know his history you may have to guess. If you try the Which Dog Food site you can specify a weekly cost and they suggest possible foods with star rating.
http://www.whichdogfood.co.uk/If you want to take a look and let me know what you like the look of I can try to help further. As an example, Skinners Field and Trial Duck and Rice is listed as £22.99 for 15kg or Salmon and Rice is £26.99. Diet could be a factor in this and I think it is worth trying out some other foods. (But no commercial treats!)
Finally omega 3 and 6 oils have been credited in some studies with helping with allergy problems. You can buy 1000mg capsules of cod-liver oil and try that possibly with 1000mg capsules of evening primrose oil. Healthspan
http://www.healthspan.co.uk/default.aspx is usually a good, cheap source.