My thoughts would be a fungal infection. Hay molds, which is why it is not usually recommended as a bedding. Straw won't mold. If they did get a fungal infection antibiotics will not treat it. The neomycin polymyxin is actually a better treatment than terramycin in my experience. My jerk of a vet does eye issues really well, and that is what he always gives me. He hates terramycin. Not to say terramycin won't necessarily treat it. But if you have been using neomycin and polymyxin and haven't seen it work, the terramycin will likely not work either.
It is also possible that they have a bacterial and fungal infection. But if it is fungal, I only know of vet prescribed medication. There may be OTC ones, but I just don't know now of any.