Hey David -
Can't really tell much about your problem from the photos, I'm afraid. However, I'll give you the standard recommendation when it comes to leather: go with Leatherique.
I've used their leather dye (it's really more like paint) to redo the interior of my 124 wagon - it had 12 years worth of fading in the Texas sun. It's very easy to apply, and I was impressed by the results. I think the dye kit was about $50, and that was enough to do an entire 7 seat wagon.
They also make the best leather cleaner/conditioner I've ever used. I far prefer it over Lexol products. About $50 for the cleaning kit too, but that's pretty much a lifetime supply.
It's only available direct. Check their website at
http://www.leatherique.com You'll also find various recommendations if you search this site - I'm not the only satisfied customer.