We'll need some more info, regal. Is this a true load-bearing beam, with some serious heavy duty lumber, or is a faux (fake) beam. Faux beams are often just simple box beams (hollow) made up of light lumber and finished to look like a single large beam. If it were a real loadbearing beam, it does not seem likely it could drop down from the ceiling. If the beam is supposed to be supporting the ceiling, the ceiling ought to drop with the beam. You may be able to tell if it's a loadbearing beam by looking at what's above it. If the ends of ceiling joists, or second-floor joists, are perpendicular to and resting on top of the beam, it's a loadbearing member, and sagging indicates a problem that needs to be addressed.

In general, it's best to remove as much damaged wood as possible, and replace it with a paste EPOXY, like PC-Woody (strong, wood-colored), or PC-7 (very strong, but gray), or PC-Concrete or Simpson Strong-Tie ET/SET anchoring epoxy (KILLER strong!... but concrete gray color). Beware of Bondo and similar auto body fillers. They are made to be sealed with paint, and will soak up a LOT of water if they are left unpainted. A bleach solution WILL kill everything IT CAN GET TO in wood, but TSP (tri-sodium phosphate) will enhance the process by making the solution "wetter", and thus able to penetrate deeper, and GET TO more rot. Most brands of TSP will have recommended proportions of water, bleach, and TSP on the box. TSP is sometimes marketed as "Deck Cleaner" in order to boost the price of this simple chemical. As for the Minwax wood hardener, it might be OK, in some apps, but it's pretty lame compared to the LOW-VISCOSITY EPOXY RESINS designed for the task of soaking into wood, consolidating the loose stuff, and then curing into... epoxy. ;') There's "PC Rot-Terminator" from PC Products, available on Amazon.com, and "RotFix" from System Three, available at Woodcraft stores. It's not cheap. With any epoxy product, THOROUGH mixing of the 2 parts is essential to success. Here is a link that might be useful: Some useful info/video on rot and products...

@ci_lantro > If that is the exterior view, then the door is hung wrong side out, to start with. The hinge pin side is supposed to be inside the house. Yeh, that's the exterior side view. I noticed the hinge pin is rusted out on the outside. The challenge is that this to a storage area on the side of our house which doesn't have much room, so there's not a lot of space for this to open inwards which is why I'm assuming they have it swinging outwards. We've got several more doors like this on our house that are outside without storm doors protecting the doors. > The door is solid wood. It is not veneered. There is a lot of flat surface so most of the finish can be sanded off with a random orbital sander. OK, good to know. Everyone else (from what I was understanding) in this thread was saying to just replace it. I haven't researched the prices on this yet, but I'm guessing it won't be cheap. It's solid wood. We just bought the house and everything on the house has high-end quality doors, appliances, etc. Turns out, nothing is cheap, so I'm trying to do as much DIY work as I can to avoid spending a lot on replacing things. Thanks for everyone's feedback!

Untreated wood shouldn't be in contact with masonry. Remove the wood and replace it with composite material or wood which is intended for the exterior use. This is a common problem in situations like yours or when regular and painted wood was originally used in bay windows etc. Here is an example just to give you an idea in a similar situation with a bay window where the wood was deteriorating an beyond including sheeting and its replaced using composite material.