That's a bummer! At least now you know what it is and can finally move forward. I have never had a case myself but so many on the site have so search mange and you will find lots of discussions about it
Wow my girl had the same exact small spot of hair loss and then hers turned red as well. I took her to the vet and he as well said is was seasonal allergies and the reason it was red was it was flared up, or irritated now. He gave me a hydro cortisone spray to spray on it a couple of times a day and rub in. I to thought it could be demodex and he said no. I found out later that she was not tolerating her dog food that I had always had my dogs on so I had to change it and now the problem is gone and the spot has filled in again and we are good to go.