It doesn't have to come out. Hot melt a straight edge to the bottom of the pan adjacent to the crack. Route a dado over the crack and almost through. Cut and fit a color and particulate matched piece into the dado making a snug fit, but loose enough to allow color matched methelmethacryate adhesive. Apply adhesive to the male and fit it in. It should be just proud of the pan. When the adhesive has set, hot melt blocks to the router bottom and route off the excessive glue and material. Sand and finish. Check the rest of the pan for hollow spots by tapping gently but firmly. If you find any, drill the pan, inject epoxy and fill the hole with color matched material and adhesive. Sand and finish. Make sure the drain opening has all edges sanded smooth and all tool marks removed too. Post some pics. This post was edited by Trebruchet on Wed, Oct 16, 13 at 13:46

I'm not sure what's behind the wood panel; I'm assuming something used to be mounted in the wall and was removed, so it's probably just empty space. The other side of the wall looks normal, so no clues there. I'll drill a hole to find out. The wallpaper will be removed; I don't know how cleanly it will come off considering the condition of the plaster behind it, but we shall see. Beadboard is a good option. We'll consider it. Thanks everyone for the advice :)

Ok - a small update. I went to our local paint/wallcovering store and she said while it is possible to put another layer on (after gluing down any lifted areas) that it would be best if I stripped and then re-papered. She then showed me a book with textured papers in it that were already colored, and she pointed out a gorgeous plaster look-alike that I loved, and it will eliminate the step of painting for me, which frees up more energy and time for me to strip the wallpaper. I don't know why it didn't dawn on me to find a textured paper that was already finished instead of the type that needs paint. DOH! But, anyways... I think that is the way I am leaning - strip the current layers, re-paper in a faux plaster wallcovering.

Sammy- thanks! I've heard about Gardz- wasn't sure if it was the right stuff for my situation but the pictures you included of both products were helpful as they clearly state that they "seal and penetrate" porous surfaces like joint compound. Excellent! The Roman Rx35 says to NOT use it over oil-based paint :( So I guess that is out. (https://images.homedepot-static.com/catalog/pdfImages/cb/cb15eea9-b75f-4261-ac3a-3bdcd59a0c09.pdf ) Gardz product info says it CAN be used over oil-based paint provided the paint is "slightly sanded" and cleaned first. Yay! That would solve most of my conundrums!!! though sanding such a huge surface area isn't a step I'm looking forward to..... the "nice" wall without all the JC/patches/drywall is pretty big. But I'll do it. One remaining question is about the areas where there are holes/gaps at the edges of the large drywall patch--should the first step be to patch these (using JC/tape etc), or should I paint Gardz over, apply some JC, then paint a second coat of Gardz....I'm guessing, apply the JC/tape first? Final set of Qs for now: when patching the holes where the phone line used to be. is patch compound ("Easysand 5") better than either the pre-mixed JC or the powdered EasySand 45? will any or all of these adhere to the oil-based paint? or better to patch after the area's been painted with the Gardz? I can't wait to get some Gardz and get this project moving along!