Kevin,
I just read through your thread and I am one that likes to save an old house when possible. Neal and the others have given some good advice. BUT the best advice was to get a framer to come in and help, or at least as a consultant. Maybe a friend of a friend but you will be all the wiser with having someone knowledgeable look at this first hand. Make sure he is a professional framer and not just someone who does occasional framing.
You've done great learning how to post pictures and using text to label them, now get someone to teach you about the framing. It shouldn't cost you that much for a consultant and then you and your buddys can go to work on fixing it. It does look like a place worth saving.
Dave Mason
