By far, your best bet is the route you are going - repairing what's there now. With the proper bonding agent, he may be able to give the whole area a skim-coat to give it new life, if needed.

Removing the trim, baseboard etc, then extending the window and door jambs, electrical outlets and re-fitting the base and crown is all just a labor intensive job. If you're careful, the trim boards won't (necessarily) break, especially if the house was built 60 or 80 or years ago when lumber was much higher quality. But even so, I wouldn't disturb a nice trim job unless absolutely necessary.

The ceiling might be a different story with it's lack of trim to deal with. Plaster ceilings are often in worse shape than walls because of gravity, etc., and coving with drywall can often be the simplest solution. Having crown molding makes it a little more work, but at least the crown that you remove will still be cut to the right length when you go to put it back up. And the only extensions you'll have to deal with would be the light fixture boxes.

Even with the ceiling, I would still repair/patch as long as the plaster is holding onto the lath well. It just so much less work.

The electrical boxes are extended back to flush with spacers.
All the molding will have to be re-cut for length.
Skim coating is often not much more expensive than covering the surface.
Removing trim is not hard, just time consuming if you want to preserve it for later use.
Damaging the wall to get behind the trim for removal is not an issue if it is going to be repaired /covered anyway.
'Wonder bars', a couple of old 4 inch drywall knives, and some 1/2 inch plywood to spread the load on the old plaster and you can pry the trim off with minimal damage.
To get started hammer a 4 inch drywall knife behind the trim, then hammer another in the same place, then drive a wonder bar in between the two knives and gently pry.
As soon as there is any movement, remove both drywall knives and use the wonder bar and some plywood on the wall and gently pry.
Move sideways till the wonder bar barely fits and pry more.
You do this back and forth over the length of the trim until it comes loose.
Try and determine how the coping and butted joints are positioned.
If any mails are left in the trim pull them through the back by grabbing with some vice grips and prying against the jaws to pull the nail through.

Thanks to both of you for such detailed responses. The problem has as much to do with peeling paint as with cracked, loose plaster. Do you get all the paint off by sanding? I tried getting the paint off once with a hand scraper and ended up with an uneven surface--some of the paint came off, some stayed on which was good enough for me, but not for other people.

I don't know what you're sanding or the age of the house, but I would test for lead before you crank up the sander.
Ron

Consider a textured, heavy wall paper. I have seen this done very successfully - I couldn't see any problem until the owners explained it.

You also might consider that if you are removing the plaster, you can upgrade the electrical and add insulation.

There's definitely lead paint involved--that's why I'm considering covering the plaster with sheetrock without taking the plaster down. I just don't know how to deal with the electrical outlets on the wall.

Spacer. AKA 'box extensions' are all you need.

Thanks!

No! It will never go back together in a way that looks "right." Why? Over the decades, the wood has twisted and molded itself to fit the uneven surfaces and the settling of the house. And as the above poster mentioned theres all this new wood that will have to be cut and spliced in to accomodate the thickness of the walls. Depending on the craftsmanship of the person doing it, you may end up with a pretty hacked up looking job. (as one PO did in my house, not adding drywall but reconfiguring some rooms).

Think in terms of repairing the plaster or drywall patches in those spots where the plaster has failed to the point its coming down. With proper precautions -sealing off areas, respirator, proper HEPA vac, etc. - its as safe as anything. And I would guess even with the labor cost of setting up to do the work safely, it would still be cheaper than removing ALL that wood and then getting it back together again.

Drywallers tend to push that approach because that's what they know--they can do it efficiently and so make $$$$. But there do exist (esp. in places like NOLA I would think) people who know and love and specialize in old houses so you might want to at least talk to one of those and get a quote before proceeding.

I do intend to ask a specialist if he/she can repair the plaster. I'm doubtful, though, because the previous owner did such a bad job trying to repair the cracks himself and because so much of the paint is peeling. A skim coat might be a possibility, though.

"No! It will never go back together in a way that looks "right." Why? Over the decades, the wood has twisted and molded itself to fit the uneven surfaces and the settling of the house."

I have re-used wooden molding hundreds of years old.
It just takes care.
Most of the old wood is far better than anything you can obtain now.

Unless the wall paint is gloss paint it is unlikely to contain lead.
Lead oxide was used as a pigment, but this stopped a hundred years ago.
What continued in use was lead acetate (AKA Âsugar of leadÂ) as a drier, hardener and gloss improver.
There is a reason the old lead paint wore like iron and remains intact enough to separate in pieces (sometimes relatively large). Even the chips produced by removing it are hard and sharp (sharp enough to cut skin).

Almost any plaster problem can be repaired.
Poor patches can simply be cut out and the area prepared again.
Most of the drywall guys are pretty helpless with plaster.
Easysand and Durabond are modern versions of plaster with controlled setting time.
The plaster on walls is not just plaster, but a mixture of plaster and lime putty, with sand and horsehair added to the base layers.
Chopped fiberglass replaces the horsehair for the first coat, sand is still a good stretcher for the second coat, and Easysand or Durabond make a good top coat.

Gaging plaster and lime are still available if you really want to go that route.

When melding several rooms/hallways into one room, I've had the dyrwallers use a texture sprayer over existing plaster. Other times, I've just drywalled over the plaster. In yet other places, the demolition crews strip everything off, then you can insulate properly, rewire and put on new drywall and trim.

BTW, new electrical extension boxes may not fit the existing boxes. Check before assuming. And if it's knob and tube, there's likely no extra wire to pull; any manipulation of the wire can cause the insulation to fall off.