It's worth considering whether medications are part of the problem but difficult child 3 does this whether on stimulants or off them. I've put it down as part of the Pervasive Developmental Disorder (PDD) and we deal with it by checking him over for large wounds and putting band-aids on anything that he's worrying at. We've now had to graduate to serious band-aids for serious wounds - you know ,the ones that are waterproof, supposed to be left on for days and are gel-filled. He still prods at the band-aid but at least the wound has a chance of healing before he gets at it again. I think part of the problem also is the tight feeling in a healing scab.
The social thing - is there a local group of Pervasive Developmental Disorder (PDD) kids you could get him into? Even if it's just one other kid that he can get along with (and we've found a few - it's usually the exceptionally bright but younger kids we've found difficult child 3 can get on with best). It improves social skills on both sides - the other kid learns to adapt to a friend with a disability, they learn tolerance but also to NOT try to fix everything themselves. We have a local group of teens with Pervasive Developmental Disorder (PDD) who go bowling together.
And yes, distraction can work for a time, if they're picking. but at some stage they'll be on their own and they will pick.
The germ phobia thing - you can point out several things to him:
1) We NEED germs in our life, to keep our immune system active and healthy. If we eliminate all germs we also eliminate our daily reinforcement of our defences. A castle under long-term siege will have all attention focussed on strong defences, walls in good condition and boiling oil at the ready. A castle NOT used to battle, however, will have the ladies doing needlework instead of rolling bandages; the men working the fields or out hunting instead of being home making more arrows. If an enemy comes up to the ready castle, they will have a difficult job to try and take the castle; an enemy with the unprepared castle could just walk right in and take over - a bloodless coup.
Our bodies' defences are very similar. Most germs are good or benign. Very few bad ones are around and most of them are related to ordinary, not threatening ones, so our bodies already have some level of defence in place if we know their weaker cousins. But if we obsess about antibacterial sprays, wipes and whatever, we are damaging our own ability to defend ourselves. A kitchen should not be as sterile as an operating theatre. It should be clean, but not sterile. Some cross-contamination can be avoided by careful practices (such as not using the chopping board after you've cut up raw meat on it - wash the board thoroughly, scrub it and scald it), but you can't expect to have a germ-free peanut butter sandwich.
2) If the sweets are wrapped then the wrapping should be sufficient protection against human handling. But if the sweets are NOT wrapped, most sugar sweets can be rinsed to wash away the outer layer of sugar (but only do this immediately before eating the sweet). However, something really important to remember - sugar, concentrated sugar, is naturally antibacterial. It's simply too concentrated for bugs to survive unless they're the kind that form spores. Basically, osmosis means that the concentrated sugar in a sweet dries out any bacteria on the surface. If the sweet is dry, so much the better (that's why you eat it as soon as you wet it, if he insists on washing it). Pure honey is antibacterial, despite having growth factors (you can use honey as a rooting hormone dip for plant cuttings). A big reason for honey being antibacterial - it's concentrated.
Do you have sugar syrup drinks? Have you noticed that if you leave them as concentrates, they keep well, but as soon as you water them down they will begin to go off.
I hope this helps.