Walls and Ceilings - Leaky ceiling/moldy drywall

I own an older home that was build in the mid 70s. My back wall faces east and receives a lot of heat during the summer months. I had a contractor replace a window that was leaking and he showed me that the black paper that is inserted between the plywood and chicken wire (I live in San Diego, CA and the homes are built like dollhouses) was just old and flaking and falling apart. Looking back now I'm pretty tweaked that he didn't replace it himself. Anyway, he told me that that stuff actually sheets the water down from the roof to the floor and that it couldn't do that obviously because it was damaged. So my question is what would be the best way to find out where the leak(s) are coming from and then what's the best method to waterproof it so that I don't have to keep replacing the drywall. There is a balcony directly over the dining room which is where the wall has been damaged but another contractor friend told me that the balcony actually is solid and he thinks the leak is coming from the patio covering that was screwed directly into the stucco and wasn't well caulked at the time. Anyway, I'd greatly appreciate any help and or wisdom. I haven't been down this path before but I'd like to give it a go sometime this summer. Looking forward to hearing from you.

Much thanks,

Gromit

I'd say your second friend is pretty close to right and there's a very good chance that's where the water is entering the wall. Can you show us a picture of what you got? I think that will help, but finding leaks second hand is hard to do.

Take a look at the balcony where it attaches to the wall and post the pics if possible. Get back with us.

Thank you very much for responding. I'll take some pictures sometime soon and send them along. Have a good weekend.

Gromit