Thanks for the nice comments. To answer some of the questions: ekoreilly: the ceiling height is almost 8' (maybe 2" shy). We had a lot more height in some areas, but large heat runs would have had to be boxed, and they would have gone down the center of each room. So we sacrificed the extra 8 inches to have a level ceiling. It feels nice and high down there, especially for a basement. Yes, the stairs originally took that turn. We had to have them redone, though, because the landing was too narrow (once the drywall was up). The rise of each step was left the same, but the tread was cut down 1 inch/stair to allow for a reaonably-sized landing. We technically may be breaking code on the staiar tread. It may be something like 7/8 inch too narrow. But the inspector didn't notice, and it feels quite safe walking up and down. The estimate (which included the whole bathroom minus some of the fixtures) was approximately $40 K--maybe a few thousand more in the end with changes/upgrades. This included digging a sanitary pit for the bathroom. It's a little more than we originally hoped to spend, but we really wanted to get the bathroom done at the same time. We did paint and carpet ourselves. legardhome: that's reallly amusing (re: your 5 year-old and the carpet tiles. I think my 5 year-old knows they are tiles, but he hasn't tried to pick any up. My 3 year-old would be the one who wants to chalk on the floor. Shhh. Don't give him any ideas. baoknguyen: thanks. We like the colors too. The paint color is Benjamin Moore's Monroe Bisque. It's 100% downstairs and 50% in the stairwell. We used a flat finish, which I already regret. I very much wish we'd went with either scrubbable matte or eggshell. The walls are looking bad already, and we've only been using the space for 3 weeks. The carpet panels are Miliken Tesserae Spectrum, and the color is called Snowflake.

Smooth is MUCH easier to repair. We had a water leak into our current kitchen from the bathroom above (three times--don't ask!) and after the first time we tried to repair the texture. Never worked (we tried ourselves, then we hired someone, but there was no way to match the original texture). After the third leak (omg I hate water leaks) we finally just re-did the entire kitchen ceiling. It was costly to do, but there was no way to match the texture from 1985. Besides, to me, texture just means the installer/finisher can't do a smooth finish properly. So if I see texture, I think less than stellar work, unfortunately (or I think OLD building).

I feel your pain. We used SW Paint in our bathroom and had the same problem; I was so mad because their paint isn't cheap and we used exactly what we were told to use. The bubbling was on the ceiling around the vent but all the walls had water stains from when moisture would drip and those wouldn't clean off at all; it looked horrible. We have an open window and vent that we use religiously, so ventilation was not the culprit. To fix it, we had to sand down the areas that were bubbling, wash the walls thoroughly with TSP and paint using BM Aura paint. That's what the guy at our local Benjamin Moore store recommended and yup, it was even more expensive then the Sherwin Williams was; it was worth it though because it worked. We followed the guys directions and let the paint cure for a week before using the shower. This did the trick, no more issues. The nice thing is that I didn't want a very glossy finish and the finish of this Aura paint is egg shell. It went on super easy and looks great! Oh and they were able to mix the SW Color I wanted as well which was a bonus!

My uncle says it doesn't look like water penetration, but since it's going to rain tomorrow I'll wait to see before I fix it. Now, he said don't cut through and remove the back of the sheet that's there b/c the vapor barrier is right on the other side? I always thought vapor barrier was over insulation and sheathing. Maybe he was talking about the paper on the drywall being "treated" and not the Tyvek? Do they make special drywall for exterior walls? Also, I never sealed under the windows after the new stool was put in. I pulled out the builder's fiberglas and used low-expansion foam around the windows before we put the finished casing up. I was wondering if I could just fill the hole with the same stuff, since it's toolable (is that a word?) and then either mud over it (don't fill all the way), or tape and mud. The DAP stuff is paintable but it would likely be a different sheen/texture than the surrounding wall so I wouldn't just use that - it would have to be skimmed with mud. But I was thinking it would be easier to apply as a backer material to fill the 1/2" deep hole than the setting compound, and I'm not comfortable with just taping and mudding over the hole with no insulation or backer under (not that the original gypsum is a great insulator, but it's better than air). I'm afraid my patch would sink like the original paper did if I leave a void behind it.