Hi...I've been taking 50 mgs (8 drops) of 5% lugols iodine per day for the last 10 years and never had a problem with it. I've also been taking the full lugol's iodine companion nutrients that you should always take whenever you supplement iodine. The full and proper protocol that you should be taking with lugols iodine or iodoral is shown here.
It's difficult to say whether your problems are entirely due to the thyroid. The symptoms that you mention could also fit other diseases like Candida, CFS, SIBO or IBS. And if you also have skin problems plus digestive problems plus a white tongue plus low thyroid and you've used antibiotics for long periods in your life then you may well have a systemic candida problem caused by a compromised and greatly weakened immune system.
Doctors are not very accurate or consistent at properly diagnosing candida so you'll have to find out for yourself. Best way is to go to this link and take Dr William Crook's questionnaire shown here.
Another thing you can do, which doesn't cost much, is just get a hair analysis. This will tell you what heavy metals you have in excess in your body and will also tell you what vitamins and minerals you are also lacking. If you are high in heavy metals and poisons with a lack of vitamins and minerals then this will confirm a low or compromised immune system and you can act on this and start taking the appropriate nutrients to resolve it.
And selenium is a primary detoxer for mercury and the primary anti-oxidant that gets rid of hydrogen peroxide(free radical) during the production of thyroid hormones. Selenium is the main metallic component for the manufacture of glutathione in your body -- a master anti-oxidant and heavy metal detoxer. So the pain in your muscles may well be due to mercury poisoning. One thing's for sure -- you have low glutathione levels in your body. So when your body suddenly starts to detox properly again via the increased glutathione levels (because of the extra selenium) then your body will naturally begin to more efficiently be able to remove all that stored mercury from the cells and dump this into the blood. Unfortunately, if your mercury levels are high, then your liver may not be able to cope with its removal and that's when these heavy metals get redistributed causing all the digestive issues, muscle pain and other symptoms. So if I were you, I would persist in taking the selenium and the rest of the co-factors and minerals with the iodine if you want to get these heavy metals out of your body. If you don't take anything for it then the heavy metals will steadily keep increasing in your body and your condition will likely worsen over time.
If you find that you do have systemic candida then you will have to take a larger protocol to get rid of it like the one shown here.