Two things here, one is that I'm not a fan of banding tails, I prefer to just cut off with an emasculator,  and secondly, you are banding way, way to close to the body.   Leave a little tail on or you will have trouble with rectal prolapses in your fat lambs as well as your replacement ewes.

As to the problem at hand, I'd cut the band off, and then cut the tail off with an emasculator at a longer length to allow the infection to drain out.   And I'd give an overeating shot with tetanus in it.