I don't know about the blistering you're seeing, but parts of your description (that it's not as peelable as it was before when you first starting using LacHydrin), sound like it's not working as well as it was before.
I don't know how much 'real' scientific research has been done on this, but I know there is a lot of anecdotal evidence (stories from individuals about their experiences, but not within the context of a statistically valid study sample)that any kind of creams they use on their skin to treat ichthyosis lose their effectiveness over time. I'm definitely one of those people. I've got a handful of creams that I like, and I need to rotate them every so often. I might use one one for 2 or 3 or 4 months (however long it takes until I notice that it's not working so well) and then I switch to another. It might be 6 months or a year within my rotation before I come back to the first cream again. And when I do come back to it (after a few months' rest), I usually find that it works better again...and then I start the cycle again.
I also find that my skin in general goes through cycles. Sometimes it just seems to get worse (sometimes I can attribute it to increased stress, or using the very same product for months, or dry winter weather, or some other specific factor...sometimes I can't attribute it to anything at all, it's just worse). This is something else that alot of people with ichthyosis talk about, but I don't think is well understood or documented in a formal scientific environment. Maybe you're just going through a 'bad' cycle?
I know the feeling though, and it's very frustrating. [img]http://www.ichthyosis.com/ubb/frown.gif