Leg discharge as a result of Diabetes

My father is a diabetic and has had 4 hammer toes removed on his left leg. He has also had tendons and a single toe removed from his right leg. His condition is progressing and there are issues his doctors can not answer:

My question: My father has an oily discharge that comes out of his lower legs and has caused a vainey, red, splotchy rash that seems to be contageous. Now both legs have it and it seems to be migrating higher on his legs. His doctors don't know what it is or how to treat it. He is likely to have a full leg amputation in December if they can't figure this out.

Can anyone help me?