I agree 100% with Dave.
Drywall is available in 1/4" sheet thickness to skin over an existing wall. I think by the time you try to coat and smooth the masonite you will have more time and money in it than it is worth.
Old walls mean old electrical and plumbing in most cases this needs to be fixed before you put alot of time in the wall finishes. That said I would budget a room at a time and fix the electrical and plumbing issues and then install new 1/2" drywall. Do it once and do it right.
Steve
Well, there are no electrical & plumbing issues...
The plumbing was redone in the late 90's, and a new electrical panel with breakers was installed in 1986.
As far as the wiring, yes, it's the old black cloth wrapped wire. However, it's 2 conductor wire with a ground, all the metal boxes are grounded, so I can easily make a jumper wire when I switch to 3-prong outlets. The wire is copper, not aluminum, so I really see no reason why I'd need to pull out all the wiring & redo it just because it's 55 years old. Yes, it's nice to have all new stuff, and I'll have that in 5 years or so when I build a new house. Can't go crazy tearing this one all apart just because old walls may have issues. Eventhough I would like to rip off all this board, replace all the wiring, and put in all new insulation, I have to stop myself from doing that. This house is not meant to be a project like that, and I'd never get my money back out of it.
I'm still not sure if I want to do the drywall. I pulled all the trim off last night in the first room I plan to remodel. I may just fix the imperfections in the walls (small holes from nails used to hold picture frames & such), paint it and put in new trim.
I did notice, this Homasote board originally had some kind of light yellow textured paper on the outside of it. They mudded up the seams & nail holes 55 years ago and none of them are cracking. I'm wondering what the best product is for fixing the small imperfections. Something that will stick well to a few layers of paint. A tub of drywall mud as opposed to a tube of spackling?