Looks like a serious case of sour crop to me. I have seen it in meat birds that I've butchered, but never had to treat it. The crop is the first place the food goes after going through the esophagus. In a healthy chicken, it eventually empties into the stomach. Chickens will fill their crop full sometime multiple times per day and it will empty over night so they can start filling fresh for the new day. If the crop empties too slowly or fails to empty over night, the food stays in the crop where it will begin to ferment - causing the problem to worsen - essentially causing a yeast infection. The bare skin on the chest is just a by product of her crop pressing up against bedding or whatever she sleeps on rubbing the feathers off and the leaving the skin raw. Someone may have some good advice for you on here, but I would also look into treating sour crop, from what I've read in the past it can be as simple as adding vinegar to the water - or in more serious cases, the treatment can be more dynamic and involved.