Hello and welcome
I am sorry to hear that your dog has had these problems with the chip - I have actually heard of this happening before - although probably not as bad as your sounds.
Unfortunately as you have said - these procedures carry risks - as do the innoculaions - but i suppose a way of looking at it is that the good they do outweights the bad - not what anyone wants to hear that has suffered this I am sure - Hope you dog makes a full recovery..
regards
DT

Which ID method would you recommend that is safer/harmless