The interior of the O'Day is in OK condition. One of the major problems is the plywood under the cushions are mildewed and mold-ridden beyond repair. It is amazing what the last owners did with it. Someone definitely went through the trouble of replacing the plywood because it certainly is not stock. What amazes me is they did not use anything to protect the wood from moisture.
Teak is the hardwood of choice when it comes to marine projects. But teak is pretty expensive. I understand if they chose to use another type of wood thats cheaper but at they at least should have covered it with something to repel moisture. Since they fail to do that, condensation and moisture naturally found its way into the cabin and eventually destroyed the plywood. The vinyl layer against the interior of the hull began to peel back and that helped trapping moisture behind and it dripped down to the edges of the plywood bunks.
Here are some photos of what it looked like:

Note the black mold in the corner of the starboard quarter berth against the bulkhead.
The old rotted wood removed and vinyl side covering peeled off. I will probably just paint the interior walls instead of replacing the vinyl.

Port side of the v-berth where the vinyl hull interior collected water to cause more mold and mildew build up.
The same port side v-berth with the old wood removed. The space underneath is full of positive flotation foam. There are also stacks of this stuff under the cockpit sole. I will need to somehow add more if I want to install the additiona lead ballast in the bilge.
My low-cost replacement:
Well, I can't afford teak. So I went shopping at my local hardware/lumber yard. I got some standard structural fir plywood that was more in my price range. After removing the old wood from the cabin and traced the outlines to the new plywood, I cut them out with a saber saw. I also decided to seal it with Thompson's water seal which I bought at the store for about $15. After more of less soaking the new wood in as much of this stuff, the results were pretty satisfactory. I shot a little video clip of some of the wood under my faucet to show the water repelling abilities of this combination:

This is the stuff I bought to seal the wood:

The next step will be to cut storage hatches and mount them inside the boat. I may be able to do that this weekend but looks like the weather may turn on me again.
I also bought a 4 ft x 2 ft piece of birch plywood, apply a similar liberal portion of the sealer and made new companionway hatch boards. I will take some photos of that next time I go to the boat yard to post here. They will give me a good test of how this sealer holds up especially if it rains this weekend.