Hi Mop,
If she gets cracks then a bit of grit or dirt could have got in and caused an abscess. Also a previous abscess would show as a crack where it burst through and the signs move down the foot as the horn continues to grow.
I am not sure that the equine hoof treatment is suitable for sheep hoof as it may contain an agent which has a softening effect on the sheep hoof. The manufacturers could advise you on this.
lucky for you the post man has just arrived with my sheep books from amazon so I have looked it up for you to see if it could be caused by anything else.
Acording to Sheep Health, Husbandry and Disease by Agnes Winter and Claire Phythian it seems that she may have Contagious Ovine Digital Dermatitis. With CODD signs of disease are seen at the coronet band where there is inflamation and often coronary haemorage. This would explain the spongy air bubble that you described.
the effects are seperation of the horn which extends rapidly down the claw resulting in most of the horn becoming loose. If it is CODD, which is a reletivley new disease and only seems to be a problem in this country, then you would need to consult your vet.
CODD is serious and contagious as its name suggests and spreads quickly particularly in housed sheep. If it is not treated symptoms become chronic and result in permanently damaged feet.
I do hope that this is not the cause of her foot problems but would give the vet a call and chat through her symptoms. A phone call could save you alot of money and heart ache as well as putting your mind at rest.