My 1953 ranch home in Zone 5A CT was re-sided with natural cedar siding about 5 years ago.  A year or so later, I started to smell mold anytime I was near the two windows (inside the home) in the middle of the North-facing gable side of the house.  The sill and some of the side trim has rotted on one window, the other I was able to repair before the damage grew (with caulk and a bit of resourcefulness).

The contractors did not remove the window trim when they replaced the siding – could this have allowed water to drain straight from the Tyvek they applied under the siding into the window wells and further into the walls below?  They did replace the metal flashing above the windows, if that matters.

What are my options to deal with the problem?  I must replace the drywall under the windows [there is no mold on the drywall that I can tell, but the smell is intense], but should I instead replace these two windows with doors (this would look appropriate)?  Should I add overhangs directly over the two windows/new doors?  I will, of course, remove the trim and add flashing tape and extend the housewrap no matter what else I do.  What is the best solution?  (And, yes, I need these windows as they are in the living room and provide much-needed light!)