"Dropsy" is a term to describe several symptoms. The basics of this happening is when the immune system, kidney's, and liver are compromised - either by causes can be viral, bacterial, and/or parasitic, or simply poor genetics - also valid to note is temperature swings, this too can cause "bloating". What happens is the fish osmisis balance is outta whack, in freshwater fish they begin to loose the ablity to maintain body salts/flush fluid. The fluid(water) accumilates with in the body cavaity at such a rate that the kidney's are unable to keep up, this is when you see bloating or "pineconing" of the scales - this action of taking in fluid is actually a natural response to try and cleanse the fishes system of what's ailing it. Salt addition to the water can help. Above all else the water your fish lives in must be pristine in condition and raising the temp may help. You need to determine what has caused these symptoms to arise. Genetics and viral infections you can do nothing about - eventualy the kidneys will go into complete failure. Bacterial infections can be dealt with using antibiotics - best used as injectibles as anitbiotics added to the water or food do little if anything to help. Parasites can sometimes be treated with agressive salt treatments.
Here's a bit of treatment advice I offered up on another board:
How can you determine the cause?? Well, it is possible to remove some of the fluid with a syringe and culture it for bacteria, but not everyone has the capability to do a culturing. Viral can't be cultured. Sometimes you can identify a parasite problem under a microscope... Removing the fluid is a way to temporarily relieve some of the stress, but doing this on small fish is "touchy" business. Not everyone has the stomach or the means to culture or remove the fluid.
Here's a couple ways to try and treat an infected fish..
1) raise the salt level in a tank in 24 hour increments of .2% or so. This is two teaspoons of salt per gallon every 24 hours - raise the tank temps to 82 deg F, optimal temps for the immune system to work. At .6% salinity you should see some reduction in the swelling and if the fish is handling the salt level OK, it should be perking up. This level of salt should be held for 24 hours (at .6%) and if the fish is still doing well, set up a dip solution of .9% salt and place the fish in it for no more than 30 minutes, then place the fish back into the tank of .6%. These high levels of salt do two things... a) the salt increases in the body and helps with internal parasite reduction- cool.gif the high salt will improve the osmotic process and might help the fish expel some of the excess fluid that's being retained.
2) giving an anti-bacterial injection, such as Baytril, doesn't hurt just in case the problem is bacterial. I realize that this option is not readily available to most as anti-biotics must be acquired through a vet.
3) if there have been more than average water temp fluctuations(average being 1-3degrees), removing the fish from it's tank and doing a .6% salt bath for 30 minutes then place it back into the tank. An increased salt level will re-start the osmotic process and help relieve the problem. If that does not work the first time, you may have administer longer exposure to increased salt levels in the tank.. A level of .3% works well along with raising the tank temps to 65F.
**Treatment protocols advised by a friend - REC