It sounds like what is common when a dog has a food allergy, what are you feeding and how long has your dog been on it?
In the mean time, you can buy some sterile ear cleaning solution at your pet store and it might be a good idea to clean your chi's ears out a few times a week til you've got the crusty bit sorted,...if the outside of his ears are irritated, chances are the insides aren't too happy either.
Maxie used to get very dry tips to his ears when we fed kibble. I used to put bag balm on them & it would help temporarily...but a diet switch is what really helped. They still tend to be a tad dry but not nearly as bad as when he was kibble fed (we're on premade raw at the moment with occasional prey model). When we first got Maya her ears were COVERED in scabs. She had a true & BAD allergy to whatever she was being fed. But with her switch to raw it cleared up quickly as well.
Salmon oil will help with skin dryness as well as adding moisture to their food as I believe most kibble fed dogs are lacking adequate hydration. But I'd look at the dry tips as a possible allergy so perhaps a food switch is something to look into?