Cord stump looks odd??

I took my baby (2 weeks and 2 days) into the emergency room last night after I called the hospital about worries with her cord stump and they told me to come in. Well after waiting on the on call pediatrician for over two hours, a doctor (who even admitted he really has no idea what to do about babies after everything was said and done) comes in and looks her over. He tells us to put Neosporin all over it and cover it in a big bandaid (which the nurse did) overnight and take it off tomorrow afternoon. Well I took it off today and it looks really odd? It's really mushy looking (lightly touched it with a q tip and it feels mushy too, and very loose), and it looks melted?

The little things around it are small pieces that fell off. I thought the Neosporin was odd because we were told to keep it dry and use rubbing alcohol twice a day to dry it out, but the Neosporin made it moist overnight. I wish I had before pics to post, but I don't.. It used to be dry and hard and the yellowish looking part is where the clamp was and it was stuck up and out, but is now folded into it. Is this normal? Do I need to take her in?