Help! Wall Dry Rot. I need some help explaining how to fix!

I am so sorry you are facing this problem. The suggestions above to sell it for what you can and move on is the best. The problem you are experiencing was caused by water intrusion, or a roof leak if you will. That leak may still be ongoing. Repairs are always difficult and expensive, and in some cases, depending on the type of side walls (vacuum bonded), impossible to repair.