I'd wrap the house with Tyvek and put up vinyl siding. If necessary consider at the time you do this if the exterior walls are providing sufficient insulation, if not once the house is down to the sheathing you could install some foam insulation panels to help tighten the house up some.
That is also the time to consider window replacement much easier to do with the house stripped to the sheathing.
Some say that vinyl looks cheap, maybe but it also doesn't rot or chip need to be scraped, painted, or stained. Every once in a while hit it where needed with a power washer and you're good. If it get's damaged it's very easy to repair or replace a damaged section.
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