What Is Wrong with My Scalp

I definitely recommend seeing a dermatologist, but in the meantime, speak to the pharmacist who filled the prescription for Permethrin. The pharmacist will know the exact strength and manufacturer of the Permethrin, and will have information about long-term side effects (if any). The pharmacist can also speak with the manufacturer's medical representative directly. Pharmaceutical manufacturers keep track of side effects, and perhaps they have seen something similar. At the very least, the pharmacist may be able to suggest an over-the counter cream to relieve your symptoms.

Be sure to keep a record of the shampoos you use currently, any skin lotions or creams you are using (and your kids too), any over-the-counter creams you've tried.

I have a house full of husband and kids with skin conditions. To me, the tiny white heads description sounds like contact dermatitis. You could have stripped the oils from your head and that caused dry skin, dandruff, etc. and then you might be having an allergic-type (not necessarily allergy per say) reaction.

When my kids have had contact dermatitis we've been advised to take a benadryl - but I would never recommend trying something like that without at least speaking to a pharmacist at the minimum.

Take pictures - close up, to show doctor.

Also - are you on a well by chance? Sometimes well water (if something wrong with it) can cause skin irritation.

A doctor will be able to tell you for sure but it sounds like seborrheic dermatitis or some sort or psoriasis or even contact dermatitis if you are having a reaction to the lotion you are using.
Maybe it's a combination of things.
The trouble with trying a dandruff shampoo or any home remedy is it might mask your symptoms making it harder for a doctor to figure out what's going on.
Take pictures and see a doctor (a dermatologist is best for this) first.

yes. see a dr for a difinitive answer, but i am thinking contact dermatitis from using the lotion.

We had lice at our house this summer as well. It isn’t the lice that cause the itching. It’s the bites and reaction to the lice waste. Itching can last for a couple of months after you are lice free. I had some scabs form as well. But, yours seems more than that. I’d also suspect dermatitis.