They do have a preference for the areas you mentioned.
Treatment requires prescription medicine applied topically to kill the mites.
If it were fungal the Diflucan should have erradicated it completely. Another possibility since you mentioned that the rash occurred at your waistline is that you are experiencing an allergic reaction, possibly from the detergent you are using to wash your clothes. Because the clothes at the waistline are generally tighter than other areas it is more likely to cause irritation and allergic response. My recommendation is to see a dermatologist. It sounds like your GP is just guessing considering what has been tried so far.