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I'd say there in lies your problem. The untreated lumber held the moisture.
When you remake the door make sure the bottom piece of lumber framing is up 2"-3" from the bottom of the door siding. Make sure you use treated lumber, and yes it can be painted. Make sure when you paint the new door that you pay special attention to the bottom edge of the siding.
I don't think fiber glass resin will work well, it doesn't bind to wood very well.
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