Hello Brian,
If you can't see any mould growing then the problem may be bacterial or protozoan and not fungal. It will probably be important to find an antibiotic active against these organisms. If you can't find erythromycin liquid then you could try 'fish mycin' also distributed by thomas labs. One 'fish mycin' 250mg tablet can be used to make 25 litres of bath. You can obtain formaldehyde from any tropical fish pet store or failing that then from any pharmacy as a stock solution of 30%-40%; the normal dose is 20 parts of the stock solution per million (in other words 4 drops stock solution per 10 litres bath (one drop being one twentieth of a ml)). The dosage of the 'fish fungus' can be prepared by grinding up one tablet into powder in a mortar; taking out a one-quarter-teaspoon measuring spoon you could add ten of one-quarter-teaspoons of table salt to the powder and then mix them thoroughly together; this will then give you a mixture of salt and 'fish fungus' with each one-quarter-teaspoon measure providing one tenth of the 'fish fungus' tablet. One tablet normally treats 200 litres at a dose rate of 1 part per million, however a dosage of 4ppm is normally safe and more effective. So, one one-quarter-teaspoon of the mixture could be used to treat 5 litres of bath.
You could divide up the 'fish mycin' tablet with salt in a similar way to the 'fish fungus' tablet, except that one tenth of the tablet would treat 2.5 litres bath.
Your final bath mixture would therefore contain 'fish mycin', 'fish fungus', salt and formaldehyde, and water of course.
I think it is best to treat the animal in a small sterilised plastic container. Disinfect the container with a small amount of the formaldehyde stock solution wiped over all its inside surfaces with a small sponge; rinse it out thoroughly with tap water. Don't touch the animal with your hands without disinfecting your hands first because you could transfer disease organisms onto it. The best disinfectant to use I think is povidone iodine (eg betadine) which can be obtained from any pet shop or pharmacy. Scrub your hands thoroughly with the povidone iodine. Rinse your hands thoroughly before touching any sick animal, but don't dry your hands on a towel because you could pick up germs again from the towel.
Start by using only a small amount of the bath, say one tenth of the volume of the animal, and pool it around the wound when the animal has calmed down and stopped moving around. Observe the animal every 15 minutes for any signs of shock such as failing to respond to stimuli. If there are no signs of shock then add another volume of bath, and so on until the volume of bath is 5 times the volume of the animal.
Change the bath at least once a day. Every time the bath is changed go through the plastic container disinfection procedure with the formaldehyde.
If there is no sign of improvement within 2 days then another antibiotic may be necessary such as a tetracycline or enrofloxacin.
It is likely that the infection will be causing damage under the skin faster than it appears on the surface. An antibiotic may in fact be working yet the damage appears to be getting worse because the actual damage had already been done before the antibiotic was used. Deciding whether an antibiotic is working or not is therefore often very difficult, and it is often easier to amputate the limb well above the apparent site of infection to be on the safe side.
You need to bear in mind that both the 'fish mycin' and 'fish fungus' are mainly anti-gram-posive-bacterials, and there is therefore a danger of gram-negative superinfection, particularly if you don't amputate the leg and remove all the dead tissue.
For the time being I would take great care of the food that you use, and if the animal will take frozen 'gamma irradiated' food available from tropical fish shops then you can at least be sure that it will not be contaminated with any pathogenic organisms. You can get many different varieties such as mussel which may be attractive to your newt.
The above information is intended as general information only and not as advice on how to treat your particular animal.
Andrew