Basement Remodel Problems

Greetings,
I hope someone can help me here.
We just had our downstairs remodeled. We had the contractor remove some old ceder shingles that was on the walls. On one side of the room was new drywall and on the other was pressboard or plywood.
My wife was very specific when she said we wanted both sides of the room looking the same. The contractor said that there was no need to remove the plywood, and that the plywood walls and sheetrock walls would look the same. We gave him the benefit of the doubt. He's the professional, right?
After he got done texturing the room it seemed to look ok. However, the morning after is a different story.
On one wall, which surrounds the fireplace and is all plywood, has splotchy areas that look like stains coming through. You can see where the tape/mud is between the top and bottom sheets of plywood and you can see the difference in color as well. There are also stains at the bottom of all the plywood which seems to be water stains from a previous flooding.
The ceiling, which is also plywood, looks absolutely perfect. It's seamless where the mud is and there are no stains.
We don't want to call the contractor back. We feel dealing with this guy is not worth the effort.
I've heard that kilz can help these types of problems. Can it? And will it affect the texture of the walls? And should we use it on all the walls? Including the ceiling and sheetrock?
Sorry for the long winded post.
If you have any information that would be great.
Thanks
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Kilz and Zinnser Seal Coat are both good at blocking stains. Neither should affect the texture much if at all. Try a small spot to be sure. Any coating can affect anything. . You probably don't need it on the areas that you like as is.
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Stains bleeding though indicates a lack of, or the incorrect, primer before the painting. Stains, knots etc will bleed though if not primed correctly. You can't clean it you will need to apply primer (bin or shellac based sealer) to prevent it from bleeding thought, and repaint.

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I never heard of mudding plywood, but even if it's OK under perfect conditions ... no amount of Kilz or additional joint compound will dry up the wet wood. -B

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