Re: Rotted wall sheathing
Before you waste money replacing anything, you need to get rid of the water problem. Otherwise you are just going to end up with it raining on your new construction.
You probably should replace all the rotted wood, but don't grab the sledgehammer just yet. If this wall is holding up your roof or second floor, you could be doing major structural damage.
Call several contractors and get their advice and estimates. They should be able to tell you how to hold up the wall while replacing the rotten wood.