Keeping water outside

When I pulled the carpet from one room as part of our remodeling project, I noticed the wood floor was rotted in the corner. This was behind the couch so we never noticed. Upon closer inspection, the wall pushed in several inches, indicating there was no support behind it. Time to rip in. 

Yeah, that's been getting wet for a while. 

Just behind this wall is a brick chimney that carries the furnace and hot water heater exhaust. The chimney was notched into the wooden clapboard of the house but not sealed in anyway. When siding was added it further obscured the fact that there was no seal between the chimney and the house.

The flashing around the chimney on the roof seems to be in great condition, but clearly water has been getting past it and into the house. The fiberboard acted like a sponge and kept this area wet. The studs, top plate and bottom sill were all rotted to nothing. 

not much you can do other than rip it all out and replace with new. The rafters are in good shape, the support beam under the floor is in good shape so I think we got lucky catching this when we did.

I will have to figure out what to replace the fiber board with, perhaps rigid insulation. I've already gone nuclear on the roof and tarred everything I can see.  Next step is to seal up all the gaps. I bought studs to rebuild the wall, but all of the two by fours were 90 inches long, WTF?

Year built?

1950 or so. 

I think I would use pressure treated wood to replace the rotten studwork.

Don't forget some sort of cap on the chimney to prevent water from running inside of it.

I think the term you are looking for is "Step flashing", but I'm not sure.  

Bricks kinda suck at keeping water out, since they are porous.  Keep as much water out as possible, but then leave someplace for it to run out the bottom...

Man, I'd be real tempted to wrap the entire back of the chimney with a waterproof membrane. Make sure whatever you use wraps outside to outside and can drain at the bottom. I would bet the water is comimg through the brick. 

Big +1 to making sure you have a chimney cap in place. 

I prefer an air gap between a masonary chimney and the house but its too late for that. 

Tar alone does not create a good seal. You need mechanical water sealing, you need flashing. It should begin well up under your shingles and go well up your chimney, creating a valley. If the chimney is wide enough you need some slope to one side or the other as well. Tar is not going to hold water out for any serious amount of time.

That chimney needs tuckpointing before you close up the wall.  A lot of moisture could be coming through all those cracks in the mortar.