I am renovating an 1840 urban row house.  The house is a frame structure, and all four exterior walls are exposed to the weather.  Much of the house was framed with salvage lumber, some from 18th century, apparently to save money.  Another money saving technique has created a moisture problem in the stud bays of the exterior walls.  No sheathing or building paper was used beneath the wood siding.  The “novelty” style clapboards were nailed directly to the studs.  Despite a diligent exterior prep., caulking, priming and painting, there is still rain penetrating the siding into the stud cavities, apparently at the horizontal joints between clapboards.  I would like to insulate with fiberglass batts, but want to resolve the penetration of moisture before doing so.  Any ideas on products or techniques to “waterproof” the siding without creating a vapor barrier on the cold side of the insulation?