New answers tagged tiling
You did hear correctly: the floor must be as flat as possible (and as rigid) in order to support the tile. You mentioned the floor being supported on posts. If there is enough head room a better repair is to shim-up the low spot from below. Depending on how severe the floor depression is this may entail hammering some store bought shims under the joists or ...
The concrete board and extra mud will be all you need. Lay the concrete board, then fill in where needed.
Sorry to say this, but number 3 really is your only option. First the reasons why: I can tell just by looking and from your description, your subfloor is rotten and now unstable. More tiles and grout are going to crack, come up. The mould is almost certainly inside the sub-floor and maybe even the jousts. Cleaning the surface will very likely not do much ...
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