Taking off old bathroom tiles and need some help!

I just did something similar in my kitchen -- and didn't put up new drywall. What I would do (though I'm not an expert!!) is patch the holes with a screen/drywall repair patch, seal with some Gardz, put on a layer of joint compound to smooth it out, seal again and add the beadboard. In reality, that may be more work than putting up new dry wall, but those drywall sheets are too cumbersome for me to carry or cut. On the other hand, if you can cut out the drywall and measure accurately to replace it, you would get a nice smooth surface with new drywall. I was afraid I'd cut a wire or something!! Wasn't sure what was hiding back there after 50 years and a few owners!

Since you sanded a lot of the adhesive and the walls are smooth to the touch, all you have to do is patch any holes and gouges. Then you can apply the beadboard. If the walls are not smooth, the drywall would need to be replaced. Putting the beadboard on rough walls any imperfection may show up.

Would sanding the roughest areas then applying wallpaper liner help? Just an idea...

Thanks for the suggestion but is pretty rough all over, might have to take the bottom part of the drywall out

I tackled this very same problem. I used a heat gun to remove 1940s tile adhesive. The plastic tiles popped off easily but the adhesive was impossible to sand first. Then, I used an electric sander as my second step. I used real plaster on the walls to do my patching. This was the messiest job in the world. The estimate for just two walls in my tiny 10x10 kitchen was $3000. So, I did it myself. The wall looks perfect. I am a good plasterer since I was a cake decorator back then. I used the same techniques. Remove the adhesive first and then see where you are at. Beadboard should be able to fit nicely over the old walls. Use a nice top molding and VOILA! Good luck, don't despair. take it a step at a time. I wan't to blow up my kitchen when I was in the midst of the process. Perseverance and an empty bank account made me continue.

Heat guns are relatively easy to use. On the second wall, my husband would heat a 12 inch square area, then I would scrape. Make sure that you have an old trash can right there next to the wall to drop the old adhesive in. Don't let it hit the floor or anywhere else. Don't step on it either!!!! The process worked much faster with two people. I did do the sanding and plastering myself. My husband decided to help with the heat gun only after my tears, screams and frustration. My husband's father was a master plasterer for commercial buildings and told us what to Do. Wished that he hadn't been in his 70's. He could have done the job in a day. It took us an entire week. By the way, my husband did not inherit his father's skillS. He has never picked up so much as a paint brush.