Sorry, your picture is very small, even when I try to enlarge it is the same small size. Can you increase the resolution. also post a picture of the white stuff up close. At this distance it looks like you have really bad case of mealybug. Which would make sense none of your treatments working. I hate to give anymore information with a more detailed photo. Sorry.

Michele

Better and clear photo would help, but it looks very much like mealybugs infestation. (IMO, worse than having fungus.)

Mealybugs like moist, warm environment so no wonder it gets worse after watering. Mealybugs spread easily, and besides causing damage they could spread other diseases.

Isolate plant - and check all that were in close proximity to it. Spray asap with rubbing alcohol, or purchased spray that works on mealies (insecticidal soap); that is always noted on the label.

Keep plant drier, and possible in cooler environment (how often do you water? what is temp where the plant is? do you fertilize?) When spraying with anything, keep out of strong light/sunlight. Spray thoroughly and make sure directly on bugs. You'll see white coating 'melting' on contact. Spray again within 7-10 days to kill new hatchlings, at least 2-3 more times.

Watch chain plant - Crassula muscosa/lycopodioides - is very easy plant to grow. Just like other succulents, it should be potted in fast draining potting mix (yours looks too organic) and container with drainage hole(s).

Most succulents - and other tropical house plants for that matter - want a lot less water during the winter than during the summer.

Looks like the same white fungus that I had.. Get a fan and get it blowing on this and all your plants. Succulents need the air circulation, fungus problems have gone away.

Thank you! I will try that!!

For the record, I had puffy white fungus that did not respond to neem or 90% alcohol. I also poked around for mealies, but was not convienced.

Mealies could be tested very easily: if you spray rubbing alcohol (or use q-tip), the white coating dissolves instantly on contact. All there is left is tiny, usually reddish bug that dies. If you pick it (with a q-tip or paper towel) and squish it, there is a little reddish (I guess bloody) smear left. (Scale could be tested same way; it is usually bigger and darker color than mealies).

Eggs are invisible (at least to me) and I believe in the potting mix, and nymphs are tiny crawlers - I do not remember seeing them either but am sure they hatch. That is why repeat treatment is recommended.

I have less experience with fungus, but any fungicide should work on those. I have used cinnamon solution (ground cinnamon dissolved in rubbing alcohol) quite successfully on fungus on aloe (but it was darker, not white and fluffy - only small areas were). Or flowers of sulfur (fungicide, insecticide and fumigant and also used to treat ailments such as skin diseases). Or any other fungicides sold (sorry, I do not know names since I do not use any). Powdery mildew could be white/whitish. It is more aesthetic than fatal - unless it is very spread. If that is the case and left untreated, leaves will eventually wither and yellow. It usually develops in high humidity, moderate temps and leaves are dry. Many flowers and veggies get powdery mildew (I believe more than succulents).

Good air circulation (using fan helps) is also recommended to help prevent fungus.

Watch chain plant is a plant that can easily be damaged by certain sprays. Best use the lowest dilution of alcohol. Avoid Insecticidal Soaps as with many Crassula. All sprays should be tested on a small spot before it is sprayed on the whole plant. Spray one limb. Wait 24-48 hours. If you see evidence of damage of any kind don't spray the whole plant. This plant can easily suffocate by neem if the concentration is too high. Remember most sprays have not been laboratory tested on succulents. Just because it worked for someone else, does not mean it will not damage your plant. I have screwed up too many times to count. I had spider mites not too long ago on a Senecio, I quickly reached for the neem bottle, forgetting this plant gets gunky when sprayed by neem. I discoloured it and killed many of the leaves. They are still falling off a month later.