You should cut out a couple of spots to look behind it and see if you have mold behind the drywall.

I personally would just remove the old sheetrock instead of rocking over it in that situation.

 

So i pulled one of the panels all the way down, and there is some mold on the other side of the drywall, about the same amout as the front. The foundation wall and the 2x4's have no mold on them at all, so i think i am safe. I will take down the remaining drywall and put new drywall straight to the 2x4's. I'm assuming it would be better for me to use green board or some paperless drywall. Do i need one over the other?

 

you could also measure up 4 ft +1/2" up from the floor snap a line and cut out everything below that line.
Then, hang sheets horizontally around the room rather than relacing everything.

 

Chsitko, If you do end up replacing the drywall, definitely keep it off of the floor by at least a 1/2".:thumbsup:

-Paul

 

Sir Mixalot, i think that is probably the main reason there is a little mold, it looks like the drywall wicked water up from the bottom, probably because it was placed to close to the floor.

Is there any other tips that can help the drywall not absorb moisture at the floor? Maybe wrap the moisture barrier from behind the drywall up the front an inch or two?

 

Chsitko,

Instead of regular drywall, look for greenboard drywall. It is more moisture resistant than the regular and is meant to be used in basements or where it is more humid.

Keep it off the floor a good 1/2".

When you finish the wall, use a mildewcide in the primer and paint.