I was a little worried that once I got the old boards off, I'd be looking at dead air space (no insulation), but fortunately I uncovered some insulation so the project would continue as planned. One thing I did find was that there is no blocking from the first floor wall to the second floor wall. This is beneficial, I am told, from major damage should a fire break out by slowing the flames from spreading to the second floor from the first. Obviously, it would have been wise to take of this now with the siding off, but there's only so much time.
With the new boards on:
And the final product: