Drywall – Tile up to drywall on outside corner

Don't waste your time trying to keep damage to a minimum. You are gonna have to patch the wall anyway. If you are installing new pieces of pipe, you will need plenty of working space, so cut a large hole (as oppossed to many little holes); You or the plumber are gonna end up doing that anyway. And patching a hole , say 8" x8" takes practically the same time as patching one twice that size. Cut you drywall along the edges of two studs, then nail 2 sections of 2x4s to each stud, in order to have a way to attach your new piece of drywall for the patch. Use drywall screws, not nails. Unless you are planning on using the existing tiles, just remove them with a moulding pry bar and a hammer. No matter how careful you are, Murphy's law says you will break a tile or 2 while trying to remove them in one piece. Are you sure there is sheetrock behind the tile, and not a substrate made of mortar and metallic mesh?

Joe, sorry to use the "answer" function again instead of adding another comment, I wanted to attach more pictures.

The tile I used was not available with a bullnose so I finished it flat on the sidewall. The edge cant be seen normally so I did not spend time making it perfect, but for your situation I retract my note about never finishing an edge with caulking. If you end flat to the wall around that corner it would be perfectly fine to use caulking for aesthetic purposes, use paintable caulk so you can paint a straight line down the whole side when you paint the wall.

Sorry I misunderstood your question, my situation was similar to yours and wrapping the tile around to the outside seemed like the best solution for me, and it looks pretty good that way (at least my wife did not complain, that's all that really matters).