One of our Standard Poodles became arthritic almost over night. Each day he got worst or vet thought he might have a slipped disc or pinched nerve. She gave us pain killers for him but the did not begin to touch his pain. We considered putting him to sleep because it was so bad. My husband went to our chiropractor for an adjustment on himself and was telling the chiropractor about our poodle. He came to our house and checked the dog out. He said it was not a slipped disc or pinched nerve but something on the out side causing this. We prayed for an answer as this dog is like a child to us. What we discovered was that for almost a month we had been feeding him a new food.. He was allergic to something in that food. When we switched to a high quality Natural pet food 3 days later he was like a puppy. It's been 3 years now and is doing great. Get on the web and research your foods ingredients! I know you'll be surprised what awful stuff is being put in pet food and treats. I would also seek a holistic vet. I'll be praying for your dog.
If it's hip displaysia, and that does seem to be the problem, there isn't much to be done except add anti-inflammatory meds - like the cortisone (steroids) your vet prescribed. The unknown infection has me concerned. Did your vet do any urinalysis to look for kidney or bladder problems? Sometimes a urinary tract problem will show up as pain in rear end, so that's one more thing I'd pursue.
If your vet has truly given up, I'd definitely seek a second opinion. There are also other meds besides steroids that might do a better job of pain management, including muscle relaxers like robaxin. Don't give up! :-)