Hi C.,
I have a 9 yr old and a 7 yr old and they both had the same problem. Never had diaper rash until they started potty training. I think it came from us using really good diapers before potty training, so as soon as they wet, the diaper pulled the moisture away from their skin. I'm not sure what's causing your daughter's rash, but could it be that she "leaks" a little bit into the panties? Or if she's in Pull Ups, sometimes those are designed to leave the moisture against the skin for a bit, for the purpose of making the child uncomfortable enough to use the potty BEFORE they wet.
My suggestion would be to use Pull Ups and for one or two days, treat it like you would treat a baby's diaper rash. You can use Desitin or any other diaper rash cream you like. It should clear up in a couple days and then you can resume where you were. If your daughter is in panties, and you really don't want to back-step to Pull Ups, sometimes Cornstarch, or baby powder containing cornstarch can help. Or you can put Vagisil powder in the panties as well. Just make sure she's not "leaking" or having accidents in the panties without you knowing...
The rash/discomfort could be the ENTIRE reason that she has slacked in the potty training area. If it's itchy/burning when she urinates, she probably doesn't want to fool with the new "big potty" idea right now.
I hope this helps and if you have any other concerns, please feel free to ask or email me: ____@____.com
A.