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I'm trying to figure out the best plan to replace the failed insulation in my attic. It's a 1.5 story house so it's really a combination floor/attic (see attached diagram).

The original insulation was faced batts stapled between the 2x4 trusses along the roof (gray in diagram). However this has almost entirely failed and was crumpled up on the floor. The attic has a wood floor with blown in insulation below it.

I could just replace the old batts and leave things in the same configuration, but I was told there could be moisture issues caused by doing that. Also complicating things is the fact that one side of the house doesn't have eves or eve vents and there is no ridge vent. There is one gable vent.

I'm wondering if it would be better to attach batts to the vertical 'interior' walls of the attic and lay others out covering the attic decking. It would eliminate any usable storage space (not that big of a deal) but seems to be the best option for ventilation.

The other issue is dealing with insulating the gap between the roof and the ceiling of the living space which for the most part is un-insulated. It's only about 2" so I can't really insulate it without blocking all ventilation. Plus I'd probably have to rent an insulation blower just to fill those spaces.

Attic diagram

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