exteriorhole-repairhvacsiding
I noticed the AC installation by my house's previous owner left an unpatched hole in the siding, close to the ground. We have a lot of rain in the fall/winter. I don't know how long it's been like that.
Is this a concern of damage inside the exterior wall? Concern of mold? Would simply patching the hole be enough?
Though the crack is diagonal it looks relatively straight. In this case I'd take a piece of wood the approximate thickness of the crack at it's widest, cut it to length and then taper it so that it fits quite snugly - you should have to use a mallet to tap it home. Don't worry about the thickness too much - but obviously it should be fairly close.
Once this fits use wood glue to bed it in and fill the imperfections, though you might get a better finish using wood filler for this. Basically put more glue in than you need so it gets squeezed into every nook and cranny. Clean it off before it sets, then leave the repair to set.
Once set use a chisel to remove the excess from both sides of the panel and finally sand to make it flush with the panel. Fill any remaining (and hopefully small) holes, prime and paint.
By making the fit tight you minimise the chances for it to move, and therefore crack, further.
The purpose of the extension on a frost free faucet is to get the valve itself in a heated space inside of your home so that it could never freeze (see the below diagram). If you only have an inch or so of insulation that's being penetrated by these plumbing pipes, it's likely that the valve would still reach the freezing point inside of your wall. So any type of build out on the outside of your home to mount the faucet is defeating the purpose of the extension. The proper way to use this type of faucet would be to build out something on the inside of your home, which I'm guessing isn't possible, or at least unattractive in your situation.
Therefore, I'd recommend getting in the habit of shutting off the water on the inside, possibly replacing the shutoff valve with a quarter turn ball valve so that it's quick, easy, and obvious when it's been done. You want to open the outside faucets when the water has been shut off so that the lines are empty when they do eventually freeze. After they've been left to drain for a day, I cover my outdoor faucets with insulating covers. This is also a good time to drain the hoses and bring them into a protected location (e.g. a garage or shed).
Best Answer
Well, that's a bit messy looking!
The best repair would be to remove the two damaged planks and replace them with new ones.
Next best would be to cut back the planks away from the hole and replace the pieces that cross the hole.
Next best would be to install flashings that cover the hole.
Mold is definitely a possibility. I see moss growing on the insulation.
Pull or push some of that insulation out of the way and check for mold. The mold can probably be sufficiently treated though this hole without a need to disassemble the whole wall.