Joe from Beaverton, Ontario has discovered that he has rot in his floor joists. All the black wood you see in this photo is rotting wood that Joe discovered when he pulled out the existing fiberglass. In places he can poke a knife two inches into the floor joists!
He has a crawl space with a moist dirt floor and no vapour protection on the insulation.
He has a few chores to do and a few choices. First he needs to poke around enough to determine just what is affected by the rot. Simply putting new wood next to the rotten joists won't work, because the rot is a growing fungus that will continue to spread.
Then he has to evaluate the cost of supporting the house while he replaces any rotten wood with new wood, preferably pressure treated wood. The most difficult and most costly is the rim joist you see in this picture, because the whole house is sitting on this piece of wood. Since it is a small bungalow, Joe needs to seriously consider if it is cheaper to tear down the whole house, or just replace the structure of the main floor. If it was just a beam or two, repair would be the answer. When it is a major part of the structure, demolition may be the most economic choice.
If he does replace the rotten wood, it is then necessary that he cover the dirt with a 6 mil polyethylene sheet to cut off the source of the moisture problem. Then he needs to get the insulation out of the floor and onto the walls with a continuous air tight vapour barrier to protect his new rim joist from condensation and future fungus.
Tough decisions requiring a real financial analysis, not just a knowledge of how to replace rotten wood.