some also put it in a dusting box, but i don't know if it's straight up or mixed.
i recently had an issue with lice. dusted them with sevin, then again 10 days later. after the first dusting, i cleaned the coup and sprayed the whole thing down with sevin spray. i let it dry, put new bedding in and sprinkled the DE everywhere i could get it to stick.
i don't think too much is an issue, as some even add it to the food (although, it works by dehydrating the parasites, so it can't really kill parasites in the intestinal tract when it has already absorbed its fill of bodily fluids)(maybe it works some other way inside the animal, i don't know; just an issue some have brought up).
anyway, don't think too much will be an issue, aside from the cost. 9 bucks for a bag of it here (menards in the organic section of garden center)
i sprinkle DE everywere i can, in the nesting boxes, the run,the coop and around the coop area on the outside, i do this once a week. i also add DE to the chicken feed and cat food. i paid $25 for a 50lb bag of food grade at the local feed store. it works for me.