I would definitely check with the vet about that skin peeling/residue, it certainly isn't normal. But I did just tackle the same bathing problem with two horses today who were sweated up but haven't been bathed regularly, if ever, so were new to the whole idea. Not to mention the yard I had them in was particularly 'scary' and a bit clustered with trees. Approach and retreat is definitely the best method. Within five minutes I had each of them standing for thirty seconds or more at a time by simply starting out slow. Introducing the water to their lips, then a bit on the hoof, up the legs. If they walked away I'd keep it on them, once they stopped I'd immediately take it off. As they figured it out they would start to stand still, and I'd take the water off them, then put it back on. I had the sprayer off the hose, and I had the horse on a lead rope. Their was enough space for them to make the decision to move around, but not enough for them to run away. Take it slow, take the time. If there aren't any other issues, this method should work.