If you're starting fresh, BIN is a shellac based bonding primer that does work great on vinyl covered wallboard. I used it in my bathroom with great results (even taping over it sooner than I should have and the paint held), and I'll likely use it before my contractor textures our walls just to be on the safe side. In the case of peeling paint (yikes!), I think christophern had the right idea: "GARDZ Problem Surface Sealer is a unique water-base sealer for porous and potential problem surfaces. It is formulated to deeply penetrate and dry to a hard, moisture resistant film that seals and binds down porous, chalky and crumbling surfaces, paints and texture finishes. GARDZ is recommended for: damaged drywall, new drywall, spackling and joint compound skim coats, plaster, calcimine, uncoated wallpaper, wallcovering adhesive residue, texture paint, popcorn ceilings and builders flat paint." Zinsser also makes a product called Peel Stop. If you can't find either of these, I'm sure your local hardware store can order it. I wouldn't trust just any primer for a job like that. Since you have two problem surfaces (peeling paint and vinyl wallboard), it might be worth calling Rustoleum/Zinsser to see what they recommend. 877-35-8155 Here is a link that might be useful: Zinsser Primers

If you can make the house look good with a little paint, you might be best going that route. Then you can afford to price the house down. Disclose to the prospective buyers that siding might be needed. Then the new owners can reside with the type and color of siding they want and spend a bit more if they so desire. All parties might then be happier in the end. Price it all out and do your comparisons.

Rugged Suede is the color on the peaked wall that divides the rooms? That's a very warm grey or a beige with grey and you are trying to pair it with cool greys -- onces with more blue. The warm undertones and cool undertones are going to accentuate each other when you put the two together. I'm not sure I understand what look you are after -- lighter/darker contrast or beiger/greyer contrast. If you are happy with the Rugged Suede, have you considered just using that color at a ligher value? You can have the paint mixed at a percentage of the formula for a gallon of Rugged Suede. If you try to mix it yourself with white, you could have trouble matching the color if you need more. Lowe's here has Sherwin WIlliams colors -- if you want a different color rather than a lighter shade of the same color, try looking at something like Requisite Gray or Wordly Gray. On my monitor, they look good with the Rugged Suede photo. If they aren't right, maybe they will give you an idea of the direction to look. You could also look at Anew Gray and Mega Greige -- Agreeable Grey if you want something lighter. If that doesn't help, give us a better idea of the look you are after. Grey means different things to different people and in different contexts.

You do know that primer does not hide with complete opacity like a final finish paint film, right? Primer is going to look splotchy and uneven, that part of what you're seeing is normal. Under normal circumstances, there is no reason to do more than one coat of primer. DIYers will often mistakenly think they need two coats of primer because the hide is so splotchy. Using TSP for interior prep is a chronic problem. I really don't know who is advising homeowners to use this stuff. The amount of rinsing necessary is ridiculous and it pretty much says that right on the box. Wiping down the walls with just warm water is enough. If there really is dirt and grime, washing with a weak solution of a gallon of warm water with a few drops of Dawn will usually get the job done - then rinse with clear water. And if there is wallpaper glue/paste residue the only thing that that will block it is GARDZ.