Hi All:

Here is my 2 cents worth on this problem.
I agree one has to approach this problem with caution, and I might say a solution that is not in any text book. These are the type of problems restoration architects deal with, because they are mixing new methods with old ones, and plywood under old looking siding is done all the time on restored older homes.

I would install vertical furring (1 by 4") every 36 inches under the horizontal (1" by 3") strapping applied every 24".
This is much the same as the method of applying wood lathe on the inside of historical homes before the rooms were plastered.
This should allow breathable space to vent any moisture that might get behind the vertical siding

NH