Sounds like u are in a very similar situation as i was, heres what worked for me..
stop using the cortisone, it will not help.
use protopic %0.1 (not .03) THREE times daily for 6 days, then switch to twice daily. I did this for 3 months and now my lips no longer get inflamed and even appear smaller due to inflammation subsiding, i have now lowered to .03 and if a "inflammation breakout" occurs I am to switch back to 0.1. I still have the regular peeling cycle, skin turning white, dyness etc but no more inflammation
also, this is key, do not use any other lip products throughout the day except, if you MUST use a thin layer for aquaphor not more that twice a day. if you have a "lib baum addiciton" cut it. you must fight this in order to rid yourself of inflammation
also, if you are scraping off the white buildup at all when wet, stop. you may however gently wash your lips with an antibacterial handsoap which will remove any loose white gunk but NOT the skin.
All this is was per Dr. James Sciubba's advice, he is probably one of the most knowledgeable people in this condition, in a medical journal he has published he briefly identifies "exfoliative cheilitis"