Remove vinyl siding asap?

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Jungle

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I realize the problem with this house is that the cordwood structure has 1" foam sheet and vinyl siding on the outside. Since then i have put a vapor barrier on the inside and insulation. So i'm getting a problem with inward drying.
I'm think in the short run take all the siding and foam off and cover with typar. Then think about replacing the cord wood entirely or creating a 1" gap that would lead to the sofits. Seems the previous wall job include 'parging' the cord wood which is the worst thing to do. What do you think about pulling out 4' sections of the cord wood and replacing with new framing, section by section? I have build an internal frame so the house shouldn't collapse.

house rot.jpg
 
What seems to be the problem is there is stucco presumably from 1948 still on the outside of the cordwood and the just nailed the siding into it cracking in many places, falling under the vinyl siding.

What i understand is that the ends of the cordwood should not be cover or parges. So will remove all the stucco. That and remove any rotten pieces of cordwood and leave 1" breath space and new exterior layer of plywood.

Do you think i should cover with typar right over the cordwood? Then another layer on typar the exterior plywood.
 

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