Bleu, that looks infected to me. I really think this is going to be a latching problem of some kind, and my guess (and I am not a bf counsellor of course) is that it might be because Meg is sucking with the nipple mainly on the hard palate rather than far enough back with the nipple on the soft palate. There's a knack to shifting this, which you would need to be shown, but it would involve getting her to lift her chin up a lot and making sure her mouth was really wide, also aiming the nipple towards her nose upon entry.
I bet on the other thread someone will have suggested the NCT helpline or similar. However I know you have had a lot of advice already, and that some of this might be conflicting, so more of the same might just do your head in.
If I had this problem, I would rest the nipple completely as an interim measure, and pump on that side for 2-3 days using the best pump I could lay my hands on, helped by someone with an interest in bf and who knew about pumps. I would also see the GP (preferably a female one who had bf herself) and maybe get some antibiotics if warranted.
If things were still a mess after a week and trying to relearn latching positions, I would be really tempted to go with the formula. It's not worth being miserable IMO.