What cause the wall damage?
The company that I used to work for a few years ago had a saying about windows. There are 2 kinds of windows, windows that will leak, and windows that are leaking.

If you have the original windows to the house, some separation may have occurred at the sill level. whether it is at the corner where the side jamb meets the sill or where the sill meets the finished window sill or even someplace else.

Your problem is defiantly still water intrusion. Was before and still is. Since there is no pictures of the window itself, there is not a lot to go on. If the windows were replaced with new inserts. It may be where the new and old meet, or because of it. It is all still a guess with out more pictures. Need a few at the inside of the window jamb with the window open, at the inside corners and outside focused on the sill.