Smith and Wesson .357 Magnum with a 6 inch barrel.

Use 'image' at the bottom of the reply box.When faucets have been leaking to the wall a while in my rentals, I sometimes cut out the bottom inch or so of the rotted plaster or drywall and install a little 4" tile or mesh backsplash.  

It was required if you planned on doing a job larger then several square inches on a wall and on a building built before 1970's (forget which exact year), which looks like you are doing.

is there proper insulation in the attic of a minimum of 12-14 inches?

I'm not too sure about that, especially with the kind of clowns I've seen put in tile here in da Burgh.I'm sure the tile floors I lay down with my incredibly talented and supremely skilled  two good hands are nothing short of perfect (always 'umble, very 'umble), but about two months ago, we pulled out about 350 square feet on No. 1 three-quarter-inch white oak tongue and groove flooring that I dated to circa 1928.

Every inch of the house is covered in it. 

You may have noticed the quarter inch thick layer of grease all over it?

Floor in lower level is settling or settled about 2.5 inches, it even feels hollow under.

Regardless, depending on the police departments sophistication, they will examine everything inch of the unit before release it back to you/tenant.

The article is below:http://www.dailymail.co.uk/news/article-3637271/Texas-man-uses-dam-filled-WATER-house-dry-27-inch-flood.html