A lot depends on what's behind that drywall. If it's an old house or the studs were not straight the wall will always be off.
Remove the drywall shim out the wall to get it flat and add new 1/2 drywall is the only good way to make it perfect.
And no never just cut out around the trim. No way to finish it without a seam that way.
It's also not likly removing the wall paper had anything to do with dips or a wavy wall. That's the studs causing that.

 

If your husband is experienced with drywall, I think you ought to replace it - floor to ceiling. As Joe said, shimming studs might be necessary. If he doesn't like taping & mudding, there are a lot of guys that do that for a living, and would probably be happy to pick up the job.

 

Drywall Question

Thanks--getting a drywall contractor here is just about impossible. I live outside Springfield MA and we have experienced a tornado, microburst and hurricane all within the last 6 months. I had a tree come through my roof and every roofing company says not before May 2012--this was in November. I have left numerous calls begging for any drywall dude to come and look at the job. I may try Service Magic soon but I had a bad experience with a contractor they recommended for another repair that was needed. Painters, drywall, plumbers, anyone in construction, can pick and choose their work because there is so much of it. The painter that said he could fix with skim coat and paint came from over an hour away and I had to pay him travel time and a high hourly rate. So...we are thinking about doing the drywall ourselves. One of the walls has no trim and the opposite wall has only one doorway--so we were hoping we might be able to get away with cutting out a large section and using as template to cut replacement and then joint compound to fill. There are no corners involved. And my husband doesn't feel comfortable with the taping/mud aspect of floor to ceiling replacement. But if that is what has to be done, we may just have to wait until a contractor is available to do this.