My son is 3 weeks old and I too just looked and I think he may be getting cradle crap. Does cradle crap looking like skin peeling, once I noticed it, I thought it might have been dandruff so I immediately washed it and it looks a little worse now. Any advice would help also.
I used the Baby Oil Gel on DD during bath time and it worked great, granted she had a very, very mild case of it. I rubbed it on the dry area and then washed it out, but it left just enough residue to fix the flakiness! My mom was the one who suggested it because she used regular Baby Oil on us as kids. I bet coconut oil is great, too! That stuff is awesome for everything!!
You can use baby oil. Don't over wash that will make it worse, make sure you are brushing their hair everyday. My first child had it and it's really tough to get rid of. she had it for a long time but those did help and it never got worse
Re: Cradle cap