Best case scenario exactly what airqual says - it's a sealant/caulking issue - you can recaulk the entire area and deal with the mold. If you have to tear out the tile work it gets more expensive quite a bit. I don't know what to advise with plaster walls - don't have those around here but I still think you probably have no choice but open up the wall to let it dry and get mold out. One thing I might try - if you can get the baseboards off the wall you could cut a hole in the wall at the lower level and see what is in the wall cavity perhaps this way (depending how high your trim goes, remember there is a baseplate). You could then patch with drywall as it's going to be hidden. but if you're not the DIY type at all, probably best to just call someone in. You have to pull the carpet out no matter what and padding and get everything away from that wall. If you do that and can identify which area looks "wettest" then that would give a clue where to start looking and I'd do that before anything else. Give servpro or other type business a call to come out and see the issue. They'll give you an estimate, I have no idea what they charge but they have all kinds of mold abatement sprays that will kill the stuff without having to totally destroy the wall. Sorry can't give you more help - I'm sure it's incredibly disappointing and stressful.

The house was built in 1967 and hasn’t seen any major plumbing changes while I’ve lived here. So the house is mostly copper and cast iron. We had a similar situation in our previous house which was built in the 1950s and had copper pipes. I'd been telling my husband for years that I could smell something like sewer in the house and he thought I was crazy. Then a few years ago we had a plumbing problem with the kitchen sink (which shares a wall with the bathroom) which meant opening the wall and found that the copper pipes had corroded quite badly. I suspect you may have the same situation, and the new septic system installation may just be coincidental.

The smell is coming from some type of mold or fungus growing in your PVC pipes. I have this problem in the kitchen of one of my beach condos. Every couple of years I have to replace the disposal, and the pipes under the sink. The smell is SOOOO strong, and nothing will get rid of it. It took years to figure out the cause. I have soaked the PVC pipes in about everything, and it will not go away. But it is seasonal, flares up worst in the fall. Smells exactly like stale cigarettes. Will permeate everything, blankets, soft surfaces, everything stinks. The smell will penetrate black garb bags, thick ones, even 2 or 3 over each other (I wrapped the pipes to buy the same ones and it stunk up my car, even triple wrapped). I have no idea what type of mold this is, or fungus, but it's bad, and it's like the fungus smell is actively spewing from the sink. It will stink up the entire place. I'm not sure how to really solve the problem for good. So I solve it periodically by replacing the PVC pipes under the sink and the disposal. Then gone. When it comes back, initially it smells vaguely organic like rotting cucumbers for a day or so, then like cigarettes, stale cigarettes. I hope that helps. I wish a biologist would find this blog and ask for a sample. I'd love to know what I'm dealing with. I'm happy to donate an old disposal for testing when it happens again. I've smelled this smell in nature too in swampy areas, but it's MUCH stronger when contained inside.

I'm not sure if this is comparable?...Our house had pine paneling in most of the rooms. Stained and varnished several times over the decades. 50+ years of smokers in the house made our house smell like a dirty ashtray. I scrubbed the walls so many times over the years and still smelled of cig smoke/ash tray. When I painted most of the paneling, I primed twice, then two coats of high quality paint in a semi-gloss (more sealing that flat). That helped very much. The bedroom and coat closet that did not get painted still smell of cigs/ash tray, so I know I'm not imagining the improvement. To me, the cig smell is similar to cat urine, in that it's a forever scent once it's built up and very hard to remove. But the priming and painting sealed the cig smell. Maybe think of painting the cabs after a primer? Not sure if applying the schellac like you just did would seal the smell in. Maybe as it cures, it might?