You are in a pickle here I think. If the wooden window is getting wet or has gotten wet in the past the job of waterproofing it will be very hard. Properly waterproofing a window is tricky and requires a little care and some speciality waterproofing products. Cutting the window's jamb level with the existing backer board is not a hard thing to do and a good first step. I might suggest you install some kerdi band to the wooden sides of the window with Kerdi Fix as an adhesive. Before any waterproofing steps are taken the old window should be sanded and check for damage. A product called "Wood Petrifier" could be used to repair soft spots on your window. An oil based priner and good quality marine paint for the window. Ideally you can tile the inside portions of the window jamb and have a sloped window sill. As Stacey mentions pictures go a long way to providing options. What was used as a backer board in the shower? Was any waterproofing measure used in the wet zone? If you like email me your pictures and I can upload them for you if your having troubles doing so. jfrwhipple@gmail.com

Here's the post I put on the bathroom forum (including the picture): Hi All, We have a grand old 1860s Italianate house with an absolutely atrocious master bath. We are planning a modest remodel hoping to get the most bang for the buck. One issue (of many) that we are facing is that while the tub is not a clawfoot, it was never used for a shower. We'd like to keep the tub but add a shower somehow. We realize that this also means tiling the walls around the tub and doing something at the far end of the tub to make sure that the water doesn't spray into the rest of the room (since the tub is only enclosed on 2 sides). I'd love to hear ideas and see pictures of similar remodels! Here's a pic (don't laugh...we are not responsible for any of the decorating choices).

He is correct. For this type of tub you need one of the bridge style faucets like these

Building code requires that you must provide access to the pump for service in such a way that otherwise permeant structure does not need to be removed or a hole through the exterior of the house not created. I forget the exact wording but you need to be able to open a panel. You can build a shower there but the access panel may be a sticking point for inspectors. Make sure to highlight that when the city does a plan check. The pump does need some ventilation but they are designed to run pretty warm. you can always put a few holes in the floor near it, is this 2nd floor or basement/crawlspace underneath?