Kris,
walking 40 minutes is not enough, neither is Yoga. You've got to really challenge your body to get it to produce high levels of growth hormone. You have a short window of opportunity to do it and improve this dryness for good.
The only thing that will do that is serious aerobic exercise, like running or biking up hill, etc'.

Please note - I was not talking about a CPAP.

Scabbing - these are simply crusts that get stuck to the mucosa and when released they tear of a few cells which shows with a little bit of blood strains. It's dry mucus, nothing else. Not scabs.