After weighing the pros and cons of different approaches, we've decided to complete our work on the downstairs before tackling the upstairs. As much as we desperately wanted to re-do the bathroom, the HVAC problem is really too important to ignore for another 3 years. Granted, we can live without air conditioning; our house was bult without it, and people survived for millenia before central heating and cooling. But since we have it, we might as well have it working properly.
So here's an outline of the new, improved Master Plan. Once the living room is complete (refinish woodowrk and floors, should be done in about 1 month), we will move on to the dining room. This room should be mostly cosmetic. We'll tear down the paneling and ceiling tiles, remove the laminate floor, and skimcoat the walls and ceiling. The woodwork in this room is minimal. We have 1 pair of windows, 2 doorways with original trim, and maybe 35 feet of baseboard. The woorwork will all be stripped and refinished. The current large doorway between the kitchen and dining room will either be completely walled over or shrunk to a normal-sized doorway. I already have unfinished replacement woodwork for that. Inside the newly-rebuilt wall will be a duct to heat and cool the upstairs office. We're tentatively planning for board-and-batten paneling 4' or 4.5' high around the entire room. The pine cabinet we bought a few months ago will be built into the corner. A new light fixture and outlet covers should finish things off.
The kitchen is next. The wallpaper, ceiling tiles, and cupboards all have to go, as do the 2 layers of carpet and "sub" floor. Hopefully the pine under all those layers will be serviceable. We'll also be removing the soffits, which should be interesting. The walls and ceiling will be repaired and skimcoated, and the original cupboards will be restored and brought back in. A couple of new units might have to be fabricated, but the should be easy to match since the originals are just plywood housing with solid pine doors. We'll either build or purchase a new countertop, depending on the material we deicde on. I'd like to rearrange the refrigerator and stove, but I can't seem to find a good layout. The chimney sits right where I wish the stove was, so that's an unsolvable problem. I'd also like an antique stove, but there doesn't seem to be room for one. Regardless, "new" appliances are in the future. The dining room and kitchen floors will be refinished at the same time, which will complete work on the downstairs.
Ideally, I'd like to be done 2 years from now. You can all laugh at me in 5 years when we're still plugging away... :)