Removal of Plastic Vapor Barrier
And this is why you don't put vapor barriers on both sides of a wall

Your problem is that you have a vapor barrier on the inside (the plastic right under the drywall) and a vapor barrier on the outside (assuming the "blueboard" is a foamboard product, that is -- if not, the housewrap may also be acting as a vapor barrier in this assembly).  As a result, whatever water gets into the wall has utterly nowhere to go, and you get a termite party in your walls because they have all the things they need to live.  (Apparently the termites beat the mold to the punch in your case.)

Remove all that interior plastic so that the stuff inside the blueboard/housewrap can dry to the inside.  Also, be glad you're fixing this now, and not in the middle of cooling season after the air conditioner aggravated your water woes.  See BSI-073 for more details about why vapor barriers are like badgers.