Ok, I gave it a go using a technique I found at shootsmarter.com over the weekend by Suzette Allen on how to magically erase bad acne. It's a really good article, you might have to sign up to access the link though, but it's free and full of neat information on photography. Here's the link to that article.
http://www.shootsmarter.com/infocenter/sa027.html I used the technique in the article to erase the dermatitis. To smooth the skin duplicate the image and under filters>noise>dust and scratches make it good and blurry to where you see no details at all. Now go under Filters>textures>grain- enlarged grain. Now, make a hide all mask or a black mask, you can do this by holding the Alt key and clicking on the mask icon in your layer palette. Now with a soft white brush at a 30% opacity or lower, paint on the new smooth skin. If you feel like you oversmoothed the skin just lower the opacity of that layer in the layer palette menu ( I lowered it to approx 70%) that way your original skin shows through a bit. Something I did notice is that your picture is slightly overexposed, which is easy to do with a black background, your camera will try to make is 18% gray, so you might want to adjust that before you work on the skin and such.
I hope that helps you some!
~Amber~