#1 - the 2% BHA is VERY VERY STRONG. It is ALWAYS suggested that you start with the 1% lotion (if skin not very oily) or the 1% gel (if skin very oily). If you get dry skin at all, you need to go with the lotions, not the gel. The lotion will help give your skin a little moisture while still delivering the exfoliation.
#2 - You are peeling because this is what the BHA does...it exfoliates your skin. Again, you started with too high of a concentration and your skin is too sensitive to it right now. Start with the lower concentration and only use it ONE time a day, or maybe even every other day. Then work up to two times a day if necessary. After that you go to 2% (and by after I mean it could be a year or so if you ever even really need to, some people have the 1% work for them just fine).
#3 - I don't know which blemish fighting solution you went with but if you went the strongest you can get (which is what I'm betting since you went the strongest you could get BHA), you need to drop down one. This is what will dry out your skin if you are not really oily. Go with just the regular blemish fighting, not the extra strength one.

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