For an out of control lice problem you need to bring out the big guns, clean out your coop completely bedding included but don't toss the bedding where your chickens can still get into it unless you treat the bedding to kill lice and eggs in it. I used Sevin spray mixed it according to the directions and went in on a warm sunny day after everyone was let out and sprayed the coop from top to bottom making sure to spray into the cracks along the wall and baseboards as good as i could. I used a hand pump garden sprayer. Don't let your birds back in till completely dry and aired out. Then I treated each bird as they came into roost I use Epernix pour on, but there are other treatments poultry dust where you put the whole bird except the head into a bag of some kind and shake to make sure the dust get all over them. Also you can bathe in flea treatment for dogs as long as it's Premetherine [sp] based. One reason I like the Epernix is no egg withdrawl. Use the Epernix like Frontline for dogs. You really need to do this whole procedure over again in 7-10 days to kill all the nits that hatch out in that period of time. These parasites can cause anemia and death so you want to treat as soon as you can. I think Coconut oil would be okay for light infestation but full blown not sure. You may kill the lice on the birds using ACV but what about your coop?