I'd take it all down and put up drywall.

As much as I hate removing plaster, I would agree, in this case

You could shim the bad parts and cover all of it with 3/8" drywall. Be sure the screws reach the strapping/joists.

I suggest hiring a professional to do a ceiling above a stair. That could save a week, provide a better finished surface and possibly save you from serious injury. The pro would be done before you could get the staging in place.

Thanks everyone. I would higher a professional if I could afford it but I rather spend a week cleaning than pay hundreds for someone to take it down. Due to the difficulty of putting up drywall in such a high ceiling, I have also been looking into alternative ceilings that may be easier to install than drywall...

I saw this really cool sustainable bamboo mat flooring that could just be nailed right on the lath...

Pull down the loose stuff, leave the lath and re-plaster. Faster and easier than getting drywall into that kind of space with a better outcome.

Plaster is the easier alternative to drywall in this case!

I'd disagree that plastering is easier and faster than drywall for someone who has never done it before.

I'd disagree that plastering is easier and faster than drywall for someone who has never done it before.

me too!!!

Yes, not a good first DIY project. I was assuming a pro.

Having watched guys do a perfect job in minutes that would have looked horrible and taken hours had I done it, plastering is one of the few things I don't even think twice about hiring someone for. When I asked my guy what it took him to learn he told me that after doing it every day all day for six months he got pretty good at it, but it took two years to get a good finish quickly. So I pay him his $50/hr quite happily and consider it money well spent.

Drywall is lifeless compared to the undulations of plaster. Do the right thing by your old home.

How large of an area are we talking about?

If small then tear out and drywall are your friends as far as economy goes.

But I'm of this camp.
"Drywall is lifeless compared to the undulations of plaster. Do the right thing by your old home."

2 links that might be of interest since you'd like to DIY.

http://starcraftcustombuilders.com/HowToFixPlasterWall.htm#.VI4VIyx0zGg

http://www.amazon.com/The-Hillman-Group-41994-Plaster/dp/B000BQP2YM

Repair what's salvageable of the existing plaster. Brown coat the exposed lath and finish coat the whole thing.

Be sure to do any demo you plan like removing the 1960's paneling at this time also.

And please don't simply cover it up with " really cool sustainable bamboo mat flooring "

Cheap is one thing but it's also another thing too.

Do the right thing by your old home.

Failing plaster is not the least bit attractive or charming and it may end up on the floor when the roofing is replaced. A professional drywall or blueboard job should be indistinguishable from good plaster. A great old house deserves to be treated with more respect than keeping bad plaster.

IMO you will regret trying to do it yourself. The most likely outcome will be a bad job that takes a month or more and could cause you physical injury, even long term disability. Save your money and get it done right.

I hope the grass matting was a joke.

I don't think it was a joke...

I'd opt for drywall myself.
installed professionally.

plaster pieces falling on stairs
would be dangerous.

best of luck.