How do I make this look good?

A picture of what it looks like now after the fix would be more helpful

Kat: maybe you could paint the lower part of the wall in a deep blue or maroon... and have it be a "decorator's touch!"

Not sure what you use the room for but maybe you can add a seat bench on one wall that would cover what you had to remove then maybe add wainscoting on the other walls. It is hard without a picture of the room itself

Use wanescott on the bottom half. If you like the dark color of the paneling, match a stain as close as you can and paint the wanescott top rail brown.

First of all, I would do full length drapes.

Seems to be a dark room, a light paint would do wonders.. Possibly cover with bead board, the lower half and paint that but leave the paneling and yes a picture of after the repairs would help ...

Not sure what you use the room for, but in my house every room could always use some storage.

Not sure if the damage covered the entire wall or not but you can do one of two things that are not overly expensive or any need of being a super woodworker.

You could put in 2 foot high storage units. I"m attaching photos so you understand what I'm thinking.

If you don't want to purchase them already made, these are simple to make and then you can paint them any color you like.

Both of the photos below are from Closetmaid. the upright version you would have to modify a bit as the shelving is adjustable. I couple of screws in the sides will be sufficient to hold it in place. The white image is ready to go. These would be tough to paint another color without putting in some time to remove the finish, but Closetmaid has a lot of colors. You would have to purchase multiple units to cover the area but this would be fast and you would be done.

If you want to build one yourself, you would need to measure your area. take those measurements, and a drawing if you can whip one up, to your local hardware store that sells lumber. They will be happy to cut the pieces for you and then all you have to do is screw it together and paint or stain it. Make sure you measure your length and height so everything is covered. then figure out where you want to put in dividers. How many do you want? Get the height measurement for those. You need to remember that you will need two of those pieces for your ends unless you are ending this unit right against your other walls.

If you get a thick enough wood, 1" thick should work, you can also use this for seating.

Good luck. would love to see a photo of what you do to correct the problem

I would remove all the paneling and replace it with moisture proof sheet rock (it's usually a purple color to differentiate it from regular sheet rock.) You may like the room now, but if you paint it a lighter tan or taupe color and add dark brown mouldings, it would look much brighter. I don't know how the wet paneling hasn't warped. It probably contains a lot of bacteria from the flood water too. Keep your family healthy and remove any flood damaged material.

If you like the paneling you could replace it with new. And save the old to use elsewhere.

You might even find a close match and just replace the bottom portion. Im guessing there will be furniture against the walls so most of the walls will be covered.

https://www.google.com/search?q=wood+paneling&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjp59fjnNffAhVxtIMKHbRoDisQ_AUIDygC&biw=1366&bih=619

Heres a site you might enjoy.

https://retrorenovation.com/2012/03/26/best-source-for-affordable-wood-paneling-made-in-the-u-s-a-for-50-years/

Hello, how a bout a hunter green wainscoting, it will maintain the look you love and not impede any furnishings you currently have

Seems like the easiest answer would be just to paint the walls. Since we don't know what they look like now it is sort of difficult to give you a answer. You could always put bead board up on the lower half.

Your rooms seems rather dark so I would paint the upper paneling a lighter shade also. A nice mirror on the wall opposite the windows could help reflect light.

Don't hold on to the old. Pull it all out and replace it with something that can be painted to your design choice. There are other ways to capture the feel of the 60's without having mismatched, worked around, panelled walls. Come back here and ask we will all have offerings on a 60's inspired room.

I have similar wood on my walls, so I understand and respect and appreciate the desire to maintain the history of the house. Unfortunately, mold is insidious and if you haven't done really good mold remediation (bleach alone is no sufficient) and really dried out the space, you are in for trouble. Unless you are absolutely certain the remaining boards are dry and free of mold, the safest thing to do it remove them and put up new wall materials. In order to preserve the history as much as possible, you could use the really good sections of the wood you remove to build or face new built in cabinets or lovely storage benches or to make a coffee table or bar or something. Would love to see what you end up with, so hoping you will post photos.