When you say the internal skim is in bad condition, is it damp and freaking up, or just heavily scratched? If it's dry and not crumbling, it could be scratched to provide a key for another coat of skim over it. If crumbling, it'll have to be knocked back to a sound surface. That shouldn't be tackled until the water ingress issues are resolved though.
Removing the dashing and re-rendering is certainly possible. Planning may be required due to the change in appearance that will entail.