Hi TwinMama!
I would check the ingredients in your cereal - my guess is they probably have skim milk powder in them. I gave ds a rice cereal that I mixed with breast milk and had no problems, then switched to a "just add water" cereal for convenience. He instantly broke out into hives around his mouth and his eczema flared all over his body

Rice is recommended as the first cereal grain because it is the least allergenic, and sweet potatoes are not really allergenic either, so I would bet that it's something like milk in the cereal.
I would definitely stop that cereal/brand. I switched ds to an organic milk and soy free cereal brand (Healthy Times) and have not had a problem since. Try it, and see if the rash stops. I hope it does!!
Good luck

Vikki