I am happy to say that Lilly's "bumblefoot" (pododermatitis) is gone!
The Epsom salt soaks, hydrogen peroxide surface treatments and antibiotic creams worked well! Her feet are now free of pododermatitis. I'm so glad I caught it early and treated it immediately because, being staph, "bumblefoot" can be dangerous (it can get into the bone or tendons and cause MAJOR damage that can lead to amputation of the affected foot/leg). I treated her feet for a few days after the end of symptoms just to be sure it was completely gone. I'm still using shredded newspaper on top of the pine shavings because I do think that the pine shavings caused micro cuts on her feet, thus allowing the bacteria to get in.