Hey K.,
My youngest child did the same thing- in fact when he was 4 months old, my husband and I went to Brazil, and left all three of our kids w/ his parents, well, when we came home my baby looked like he had been on chemo! He had scratched his head so much he had bald patches... needless to say he wore a cap a lot in the following weeks. I just kept his nails really short, kept a little cap on him and to help clear up the cradle cap I used all natural tea tree shampoo (be care full it can sting the eyes) that I bought at Whole Foods. Eventually he out grew his head scratching and has a full head of beautiful red curls.