I removed a rotted old fir wood deck from the back of our trilevel house to see what options we might have for replacement. It sat right against the house, with the header nailed into the siding. The ground slopes from the south side to the north side along the back of the house. About midway a 2-ft retaining wall was constructed and the area was backfilled, to make exits at the upper and daylight basement levels possible. The entire deck (36x16 ft) was built at the upper (main floor) level and extends out above the lower level. The lower level is a large concrete slab.

Here is what else I found after removing the deck. The deck area at the upper level was excavated to 10 inches below door level. There is an small 8x10ft concrete aggregate pad (probably made from driveway leftovers) directly in front of the door and at the 10 inch level. This was the original patio and one side of it sits on top of the retaining wall.

All the rot indicates this ground-level deck was a bad idea and we are not likely to repeat it. (Feel free to convince me otherwise!) One possibility is to turn the upper (ground) level into a patio and and use two levels of deck to step down from the patio over the retaining wall to the lower level. The excavation was a bit rough and there will be some leveling to do in the patio area which is a coarse broken gravel bed of undetermined thickness.

Here are some questions:

1) How could I make a stable bed for the larger patio, leaving the smaller concrete pad in place? Presumably this would involve raising the level several inches over the concrete as well as gravel.

2) Wouldn't water collect on the concrete aggregate surface? We live in the rainy Seattle area. This could be an issue.

3) As near as I can tell, the retaining wall is about 3 inches thick and not poured as part of the foundation. It is freestanding. If I have to remove the pad, would this damage the integrity of the retaining wall?

All of this is too complicated for what is left of my mind. Any help would be greatly appreciated.