Removing the paint over the old mud was not a problem, but I got carried away and went up too far. A friend was concerned this would create a problem, other than creating a rough surface, because it would decrease the moisture barrier in the old drywall and allow moisture to seap into the gypsum and into the wall cavity; which he thought would lead to more mold years down the road.
My assumption would be that if I can put a skim coat on and then cover it with a couple coats of a good primer, like Kilz, and then a good quality paint then I shouldn’t have to worry too much about the moisture barrier. Would you agree?
By the way, thanks for all your quick responses.