I appreciate all your help. Two sides of the house's siding (clapboard, east & west) are in great shape, so no reason to remove/replace this part. The south side (upper level), being exposed to the sun for 100 years (this is in south Georgia)has gaps, rotted/dried out wood, we had to replace all the exterior trim on the windows. The north side is damaged from 'additions' and from where water lines/leaks were added improperly and caused water damage on the siding. The damaged siding is falling off, rotted from water or sun exposure; I would not replace this if I felt there was another choice. I can't use an exterior wrap (that has any depth) because this would cause the replaced siding to not align back up where it is now. What I want to do, is find a way to protect what's on the interior side of the siding, so 100 years from now or if any gaps should exist, the insulation is still good and protected from damage. I was thinking about the 'caulk' I've seen used on log homes, it expands and contracts with the wood preventing leaks and gaps. Do you think this would work if we caulked the interior of the siding? Then installed the insulation, then a vapor barrier, then the greenboard & plaster? Thanks again.