When I lived in New England I had a terrible problem with peeling lips. My husband read that peeling lips is often due to mineral dificency. So, I started drinking mineral water and found Gerolsteiner to be my favorite. It is high in mineral content and I like the big bubbles. http://www.finewaters.com/Bottled_Water/Germany/Gerolsteiner.asp The mineral water greatly helped my peeling lips. I was amazed at the difference. Plus, all the minerals are good for so many other parts of the body.
Regarding witchhazel, this can be drying so I can understand why it made your condition worse. I have been using a 2% glycolic acid and grapefruit extract toner on my face for over a year and really liked the results so, recently, I started using on my lips (just wipe the same cotton pad w/toner that I use on my face and wipe it across my lips). The glycolic acid and grapefruit extracts exfoliate dead skin. I use much less lip balm now. http://www.mariobadescu.com/productDetail.asp?ProductID=20&CatId=2