What skin is dislodging itself? You should have started with raw, red lips--nothing really should be dislodging...unless by "skin" you mean "scab"...in which case, I do recommend you get rid of those things first. Science states that scabs slow the healing process, making it difficult for a wound, any wound, to close.
Are you seeing any vertical lines, by the way?
If I were you, and I saw the lines, I would stop applying the aquaphor within 7 days. At least stop applying it nonstop--just nights and mornings. During the day, stick with regular lip balm, preferably an organic brand.