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Scary Bad Ceilings and Walls-- Help!

We just bought our first house, a 1947 cape-cod-style 1.5 story. The ground floor walls are plaster, covered with wallpaper and paint, and are a lot of work but we understand them. Upstairs is a different story.
Our second floor has two dormer bedrooms and storage closets on both sides along the length of the house. The walls, ceilings, and slanted dormer ceilings are covered with very visible wallpaper and tape seams every couple of feet. The six+ layers of paint scrape right off, revealing smooth brown wallpaper backing, wallpaper seams that say "washable, place seam here," rough, and dark brown paper beneath that with holes and water damage. We have no idea what the actual walls and ceiling are made of: they seem to be about 3/8" thick, slightly crumbly, spongy in areas of prior water damage, and bonded to the rough brown paper.
We just wanted to get rid or the tacky looking seams, but found this huge mess. Some areas of this board will probably need to be replaced. The brown paper clearly cannot be sanded smooth. Does anyone have any idea what these walls and ceilings are made of and what to do with them? We'd rather not re-sheetrock, as we want to preserve the trim and built-ins. We're open to mudding, but don't even know where to start with our mystery walls.
I'll attach a photo, and link to a photobucket album with multiple photos. Thank you for your help!


Re: Scary Bad Ceilings and Walls-- Help!

They look like plaster. Try using dif to remove the paper or rent a steamer. You can patch the holes but you'll have to take down the spongy areas to the lath. You might want to get someone who does plastering to do the big areas or have them do the repairs. Make sure they do plastering and not drywall cuz most drywallers are clueless about plaster repairs:eek:. Hope this helps :D

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