Re: Handyman suggestion - is this nuts?
The handy man's suggestion is actually a good alternative and is done in certain cases. It is somewhat a cost effective method.
Attaching the foam sheets to the existing wall provides an R value of approx. 7.5 and it would be a continuious thermal break which is an advantage.
Of course there will be the need to extend the trim work and the electrical.
You do need to check with your local building authority if they accept this method ..... lots will.
"" an ounce of perception -- a pound of obscure "