I have been using the following moist healing recommendations for healing
severe or deep nipple wounds with a lot of success for about the last 10
years:

1. Ultrapurified lanolin applied SPARINGLY to nipples and areola after each
nursing
2. No bra or bra pads
3. Epsom salt soaks four times a day (I tell mom to follow the label
instructions for dilution--if it stings, its too strong) Put warm epsom salt
solution in a bowl and soak as much of the breast as possible for 10-20
minutes. Epsom salts cleanse the area and are both  healing and soothing. The
warm solution may increase circulation and aid healing.
4. If the nipple wounds look really deep I have the mom use a LIGHT coat of a
triple antibiotic CREAM (neosporin) after the soaks as a prophalaxis against
ascending mastitis. It is important that she use a product that is not
petrolium based. An ointment will need to be washed off and may delay
healing.
I've seen the nipples heal in as little as 2 days. (providng of course that
the latch on problem has been corrected and the baby is no longer damaging
the nipple)

I recently used this treatment for a mom with severe nipple wound who healed
in about 4 days . She lost one breast to cancer 2 years ago. Apparently her
doctor told her that sore nipples are normal and because she has only one
breast it was getting twice as much use as normal "so of course it was going
to be sore." She waited 2 weeks before getting help. The nipple face was so
erroded that it was concave and at least 1/4th inch deep. The milk was
grossly bloody when pumped.   She also had a raging mastitis. Mom did pump
for the first 24 hours, the milk was clear of blood after the third pumping.
 I saw her on a Monday and baby was nursing beautifully without maternal
nipple pain by Saturday. The nipple had only a small scab left where the
deepest area was.

Hopes this helps
Marie Davis