somewhere on that wall you have a water leak or water is finding its way to that particular place of the wall. the sheathing you are speaking of is plain old chipboard that doesn't have a waterproof adhesive [ the stuff they used to make the chipboard panels] you are looking at a labor intensive job.
the exterior siding has to be removed. the tarpaper has to come off. you need to remove the faulty sheathing. you need to replace the sheathing, rosin paper and the siding. way too much for a DIY. Call a contractor.