I was moving a bolt storage rack in the basement, and when I took it off the wall, I noticed that the wall behind it was moldy. Then I noticed a ripple in the paint going all the way up, and when I followed it with my hand, the paint cracked off in a relatively well defined vertical path. I knew at that point the wall needed to be removed.
As I did that, I found very soft drywall, and the insulation behind it was blackened.
I removed it all, and I found some wood had been eaten. Then, I realized that a LOT of wood had been eaten. I'm not sure what I have here and how to proceed.
Best Answer
The last couple pictures appear to be wood boring insect damage (termites or carpenter ants). I'd spray the area with pesticide, setup bait traps in a perimeter around the home, and in this location, sister or replace the stud with a pressure treated 2x4.