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The most important part of painting is the prep, especially when it comes to surface texture and cleanliness. Sounds like some of the siding had some sort of contaminate present prior to paint application.
Recommend you remove loose paint, feather edges, clean thoroughly with compatible solvent, and re-apply paint.
Not sure as to the proper type of paint for the siding you mentioned, but I would assume that a good grade exterior paint whose base is compatible with the existing paint be used. I'll leave specific brands up to someone else, any takers?
Good Luck!
Joseph
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You've got to love remodeling your Castle! 
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