40 drops is a -lot- of iodine, so it doesn't surprise me you'd get crusting! Iodine does have functions in apoptosis, after all.
Look at the Iodine co-nutrients grizz linked to, and PAY ATTENTION TO SELENIUM! Selenium methionine. You might have high needs if you've been on Iodine alone for so long.. Selenium helps keep cells healthy- it's a necessary antioxidant mineral, and you don't wanna skip it. It helps keep the iodine from pushing too hard on the thyroid gland.
I have been getting dull pancreas complaints too, especially after a meal, about when I should be producing my own insulin (type 1 diabetic). Selenium really makes the difference for me with the iodine, I go from feeling achey and having really sore joints (feeling viral) on the iodine, to feeling awake and well when combining the two.
I use Magnesium Taurate myself, though Magnesium Malate is nice and gentle. I've tried citrate, oxide, chloride, etc, but have had the least side effects on low doses of Taurate and Malate.