Problems with siding over asbestos shingle over exterior gypsum

Years ago I had a roofing and siding company put up siding on my home, with "fake shake" panels for the front. The original siding is asbestos shingles and the contractor I hired put up the new siding over these.
The problem is that the original asbestos shingles were installed over exterior gypsum sheathing instead of plywood. Now I'm faced with the problem of the siding panels coming off the front of my home in bad weather because at least some of the nails wound up breaking into the gypsum and no longer provide good fastening.
After some discussion with some friends it seems my most likely option is to remove the siding panels, asbestos shingle and gypsum board, replace the gypsum with plywood sheathing and put the siding back up. I expect this to be an expensive job, as about 300-400 square feet needs to be replaced.
I'm wondering if there are any opinions as to whether the contractor who did the work should have advised us of the problem, or whether this is an unexpected situation. This contractor has been in business for many years and I expect they should have a lot of experience. So far they have been honoring their warranty and putting the panels back up but I expect they will only come down if another nor'easter comes through.
I've had the contractor do roofing work and replace windows and I haven't had problems with that work. I'm just trying to decide whether I should be considering them to fix the siding problem.
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It will be expensive if for only the disposal cost of the asbestos. A contractor will be required to dispose of it properly. If you get a permit it will become a prominant issue.
I can think of a few hack ways to stabalize the shakes but ultimately you are probably correct in wanting to tear down and replace the whole wall.
In the end, eliminating the asbestos will relieve you from having to disclose it during sale and should increase the property value.

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