Rashes around the nipple are usually eczema, and that may be what he had when he was diagnosed as having "contact dermatitis." Eczema usually itches rather than hurting and burning, though, but I really can't think of anything serious this could be. My advise is to apply 1% hydrocortisone cream 2-3 times a day and make an appointment to see a doctor when you can. If the rash and symptoms go away before the appointment, so much the better. But I don't think you need to worry.
Best.
Dr. Rockoff