[Greenbuilding] Exterior insulation retrofit

[bill.allen at verizon.net]

Hi all,

I am researching a project for my single family home. Classic 1926 stick construction. Zero insulation in the walls...time yet again for an external paint job. Would really appreciate comments on the following plan:

We never want to paint again...are thinking of natural cedar shingle siding, maybe with preservative but otherwise left natural.  Don't like the embodied energy in the various cement siding solutions....alternatives?

While the siding is down, fill the wall cavities with cellulous from the outside.

Replace original double hung windows with new construction insulated, R-5 if we can afford it, windows mounted "innie" on the plane of the original dimensional 1x lumber t+g sheathing.

Add external insulation....rigid styrofoam.  Since there is no interior vapor barrier (plaster on wood lathe), I am worried about the dew point ending up in the center of the wall...therefore, per the building science article, add 4" of styrofoam to the outside to keep the dew point external of the sheathing. 

Will require careful details at windows and other penetrations.

Big job...has anyone done this?  Any comments on any part of the above would be most welcomed.

Thanks,
Bill