Well we finally found out yesterday what has been causing our Bichon to scratch his ears so much and make them bleed.  The vet did an ear scrape two weeks ago but found nothing but sent some blood away for testing for Sarcoptes.  The receptionist phoned yesterday to say he has tested positive for Sarcoptes.  I am over the moon because we thought he had skin allery and he has been on steroids on and off since being 17 weeks old.  We went to the vets last night and they have prescribed Stronghold to get rid of the mites.  I just wish they had done the test sooner then it would have saved him soo much suffering. :-(

Remember that sarcoptic mange is transmissible to humans as well as other pets. You'll find this article informative, and there are many more pages about it on the net.

Yes I asked the vet whether we should be worried about us getting it and he said no.  None of us have had any unusual bites or rashes or anything so I think we should be okay.

Someone gave me this link as well which I found very informative
http://www.thepetcenter.com/exa/mites.html

I was horrified to read all the time he has been on steroids - the mites have been reproducing - it actually helps them to breed

I very glad you have got to the bottom of it and hopefully soon the little fella (I nearly said mite :p) will be a lot more comfortable soon.
The problem of which tests to run is always a tricky one isn't it?  I think medicine always has to work on the basis of most common things first and work up depending on response to first line treatment.  If the full barrage of possible tests was run on first presentation many an owner would be miffed when it turned out to be the commonest cause and the other tests were superfluous :)