I had an allergic reaction to the bleach and color toner when I had highlights done in a salon 5 months ago. 

The chemcial damage seems to have changed my hair strands from medium/slightly wavy, to fine, straight and fly-away. No matter how much conditioner I use or what I try, the thin hairs are flying.

This is a first for me and I don't know how to deal with my new dry, fine hair. No body at all, just flat. My dermatologist said if the bleach fried the hair strands they would die and fall out. Which a lot has. But what is left is still very fine hair.

Has anyone heard of this before? I never colored or bleached my hair before either. Never will again. I'm 47 years old so don't know if hair will recover.  

Is it growing back in fine and thin?  I have never heard of anything like that but if that is happening to you you should probably see that dermatologist again.  To my knowledge the only thing that changes hair texture permanently is chemotherapy.

If you are talking about the hair that was actually fried by the bleaching you may need to cut a lot of it off before it will begin to behave and look better.  Really damaged hair breaks off and it usually breaks at the point where the fried hair meets new growth.  That may be why it appears thin to you.  It is actually much thinner since you have lost a lot of it due to breakage.  If you cut it shorter it may slow the breakage as there will be less weight on each strand.  You can also try using deep conditioners every day.  My daughter did that after a particularly bad episode with bleach and after a couple of weeks her hair looked and behaved much better.  I have also had that same experience with perms.  The best thing to do is cut as much of the damage off as possible.  At least you have had five months of new growth.  That is a real good start.