Not the writer of this information.
A note before the decription begins: THE SCALES DON'T HAVE TO BE PINECONED FOR THE FISH TO HAVE DROPSY!!! If you begin treatment when the fish begins to swell (before the pineconing begins) you have a betta chance of the fish's survival! I've found that it's difficult...nearly impossible...to cure a fish of dropsy once the scales begin to protrude from the body.
(Some/most of this is from Dan, on the Acmepet Fish Tails board)
Dropsy IS NOT A DISEASE, it is a symptom. The standing scales and blown up appearance are the result of swelling within the tissues and organs of the fish due to a build up of fluids in the kidneys and an inability to excrete this fluid in a normal manner. in other words, advanced kidney disfunction.
The problem with treating this disease is that there are a number of "potential" causes: bacterial infection, parasites, cancerous tumors, virus', internal fungal infections or sudden temperature drop of more than 3°F. If the cause is bacterial, the swelling typically comes on pretty rapidly. if swelling is gradual then one or more of the other potential causes are more likely.
What to do? First EPSOM salt, at a rate of 1 teaspoon per 5 gallons, which should help alleviate the swelling a bit. Why epsom salt instead of other salts? Because the fish can't remove the sodium from it's own body...you add sodium to the water and it increases the problem. Epsom salt is made with magnesium, not sodium.
Next, raise the temp to 86°f as quickly as possible. If you think it may be parasites, treat for them either before treating for bacteria, or at the same time. It is better to treat for parasites before raising the temp because elevated temps increase their rate of infestation, making the situation worse. I have used Clout with Kanacyn/Maracyn products with no adverse affects, and there is a product called Paragon that treats for both bacteria and parasites (both treatments in one bottle! Great idea!). Make sure there is good aeration during this treatment. There isn't as much dissolved oxygen in warmer waters. Keep the temp at 86°f for a full 2 weeks at least. One of the causes could be Aeromonas, which don't tolerate high temps. A second suspected bacteria that causes dropsy is Mycobacterium.
Begin treating with Kanacyn, or any broad spectrum antibiotic (treats for both gram positive AND negative bacteria).
For the parasite treatment, see the parasite section for a description.
I usually change 50% of the water every other day while treating the fish. I have saved 5+ fish with this method. I depends on how far the disease has progressed (remember: treat before the scales pinecone if at all possible!), and the age of the fish. Very young/old fish, and fish who've stopped eating, usually don't make it.