This is late, but I wanted to say I had a similar experience a few weeks after we moved into our new home. In our case, a brown water spot showed up on the dining room ceiling, right under the master bath. Naturally assumed it to be leaking pipes in the bathroom, but surprise surprise, it turned out to be a leaking plumbing vent pipe's boot on the roof of the house, over the master bath. (Of course that was not known or realized until the dining room ceiling was opened up by the plumber in four places seeking a leaking pipe!) The rain water found a path through the roof, down the exterior wall, bypassing the master bath ceiling, and then it hooked to the left and emptied into the dining room ceiling. Those details aren't my point here - I'm just saying these water leak sources can be tricky to locate. And yes, the people who sold the house to us were well aware of the problem and had shoved foam rubber into the vent pipe's boot from the attic in a feeble and irresponsible attempt to remedy the problem. $150 for a roofer to fix that boot would have prevented costlier damage that we paid for. $500 insurance deductible meant we paid the entire $480 repairs out of pocket ($150 to fix the boot and the balance to fix the dining room ceiling that never should have had to been torn up!!). And yes, we too had paid an inspector good money to look things over prior to purchase but he didn't see this at all. By the way, that was just the beginning of my roof vent pipe boot failures - a second one failed soon after, filling a bathroom light fixture with water - just like on the 3 Stooges episodes!! We ended up replacing all of the boots even though the house was just 7 years old. I hope you didn't get too discouraged - I find that home ownership is a roller coaster ride of good times and costly repair times! Overall though, you'll probably make money off of the investment in your home in the long run. Godspeed to you.

"but I'm wondering if a bathroom leak could be causing damage to such a large area and also if it looks like the flooring will need to be ripped up in all the rooms or just the bathroom." An unchecked leak in the bathroom could certainly damage a large area. Why does the flooring need to ripped up? You will proabably have to remove most of the garage ceiling below and open some walls to determine the extent of the mold in the wall cavity. If the built-in soap dish fell off the wall, this could be a source of the leak as well. Was it positioned such that water was constantly spraying on it during a shower? Was the shower running when you saw water dripping? or immediately after someone took a shower? If you observe the leak, cut a hole in the ceiling and see if you can follow the water path back to the source. Good luck.

The issue isn't the wallpaper so much as it is the new sheetrock meeting the old and the inevitable electric that will need to be done in the walls. Patching sheetrock in that situation is a much poorer choice than replacing it all. It's probably cheaper for the materials and labor for that portion of the job to do all new than to fuss around with patching holes, channels, and butt edges. Those repairs are hard enough to get looking good by a pro, and then you add covering up wallpaper too. It's just not the way a true pro would approach the job. And I have to agree that at several K cheaper, there have to be other shortcuts or low allowances in the work. If the other two's prices are fairly close to each other, that's probably what the job really costs. Low bids that are that much lower are red flags. It doesn't always correlate that cheap bids meet cheap work, but it's more of a truth than an exception to the rule. Get more bids if you think the other two are high, but be prepared for "sticker shock syndrome" Every time I go to get an estimate on something, the first quote I get totally shocks me at how high it is. It's only after I get more quotes that I realize how inexpensive the first bid was.

If you are using acrylic paint, it's very hard if not impossible to brush out a door, or any large surface, and have it come out looking good. You should either roll the door and leave it or roll the door and brush out the rolled paint. Modern day paints just dry too fast. Aura is a good product for rolling and the Aura extender you can buy to increase the open time is also good. Regal is not really a good product for rolling...it does not self level as good as the Aura. Also, this does take practice. DIY'ers and homeowner painters have 2 tendencies. They do not put enough paint on and they overwork the paint. The key to getting paint to look good is to put the paint on heavy and then leave it. After 15 second have passed, do not go back into an area that you have already painted. Try a 4" Wooster Pro Dooz sleeve, 3/8" nap or even 1/4" if you are afraid that 3/8" is too big. The pros always tend to use bigger naps than the homeowners. Try not to get frustrated...painting these days is hard! This is why I try to spray as much as I can.