It sounds like an allergic reaction, possibly. Aveeno baby shampoo scores a #4 "moderate hazard" in the Skin Deep database (cosmeticsdatabase.com). It still shocks and angers me that so many products sold for babies in the U.S. contain so many untested chemicals -- and some that are known carcinogens. I would suggest using a gentler, more natural product. We used Dr. Bronner's for a while (diluted with water), and now we use something by Weleda, which is also sold in Europe, where they have to prove that chemicals are safe *before* using them, unlike here in the States.
Also, our doc told us that you don't even really have to shampoo baby hair at all. Just massaging warm water into the scalp is usually good enough. (And since her skin is irritated, I would stop using any shampoo for the immediate term.)