I'm not for the rocks in the walls, they will also retain the cold.
I would use stucco/plaster walls as the last wall covering, then it is in constant contact with the inside heat,as opposed to being sandwiched in the middle somewhere.

I think insulating the outside walls, from the outside of the house, under the siding would be more effective. You would get that tight seal you want out there to keep the summer heat and winter cold out of the framework/walls.

With your tips and other research, I think I have decided on doing the following:

1. Tear down the old wall and take out the old fiberglass.
2. Install 2 inches of XPS foam in each cavity. I will cut it a bit small and use canned expanding foam to get a good seal around the edges.
3. Build another 2x4 wall inside the first one. I will stagger the vertical 2x4's to reduce thermal bridging. I may even leave a 1/2 inch gap between the two walls to almost completely eliminate wood-wood contact (the top and bottom plates) and allow another 1/2 inch of insulation area.
4. Put up netting and then blow the remaining gap (~5-5.5 inches) with dense pack cellulose.

I have run the numbers, and this is the cheapest option (besides reusing the old fiberglass). It will run me about $275 (just for insulation, not wood or drywall) for a 240 square foot wall.

In regards to adding the foam to the outside of the house, I like the idea, but there are several problems:
1. I don't want to replace the siding at this time.
2. We have a walkout, so the top of the siding on the back and side of the house is about 30 feet in the air. Probably not a job I'm comfortable with. Adding in labor (even if just taking down then putting back up the old siding) would add too much cost to the job).
3. At least half of the reason for this job is to decrease outside noise infiltrating the wall. From my research, it seems dense pack cellulose is the way to go. The XPS doesn't decrease the sound much from what I understand.
4. When the siding does need to be replaced, I will still have the option of adding more XPS at that time.

My only question is: do I need to put up a plastic vapor barrier on the front face of the new 2x4 wall? I understand that the XPS is a vapor “retarder”, but I don't know if I need an actual vapor barrier on the inside part of the wall. I plan on sealing the new drywall pretty well, so I don't know if that would be good enough. I also have read some things that it's not good to have cellulose "sandwiched" between two vapor barriers. Any moisture that gets in there doesn't have a chance to escape. Any words of wisdom?

Thanks!

The XPS is a vapor barrier. You can't have another one in the wall anywhere. Once you go down the road you're talking about you can't put foam on the outside as it will create a vapor barrier sandwich and your sheathing will never be able to dry. You will end up with a rotten house. This is the #1 reason I never recommend people to put foam in their walls. Once you do it you are committed to foam and you can never put foam on the outside or eliminate thermal bridging at the band and rim joists. When you gut the bottom floor you will be able to foam the band joist from the bottom but there will still be appreciable thermal bridging through the joists connected to it.

I have foam as an outside sheating (looks to be about 3/4-1 inch). I have metal cross bracing instead of plywood. So, right now I have siding-foam sheathing-2x4 wall.

I am planning on putting the new xps just on the inside (butted up against) of the current exterior foam sheathing. Then I want to blow cellulose on the interior side of the xps.

So, if I'm understanding you correctly, I should still be able to do more foam on the outside in the future, correct (because I don't currently have plywood sheathing)??

I guess it seems weird to me to NOT have a vapor barrier on the inside, but you think I'll be ok?

Ahhhh. Foam sheathing and metal let in bracing. You'll be OK. Just make sure the cellulose doesn't bulge the foam sheathing out. You also have to remember that you need at least 40% of your R value to the outside of the wall in the form of the foam or you may have condensation issues. And NO. You can not install a poly barrier under the sheetrock. Again, vapor barrier sandwich. Also you have a ton of plastic in your wall already. I personally wouldn't want to live in a plastic box if I could help it.

You only get a vapour barrier when the XPS foam is 1.25" or thicker and well sealed. Somewhere I have an article from the Building Science Corp that shows a couple of inches of closed cell foam on the outside followed by either mineral wool (roxul) or cellulose. A vapour barrier is still needed on the inside. Note that the entire cavity needs to be well sealed because rot comes from continuous fresh moist air. If you don't use the foam on the outside a standard air barrier (tyvek) would be needed.

Also, on the inside, I put a radiant barrier over the studs (and over the vapour barrier), then 2x2s horizontally on 16" within which goes all the electrical. That way there is no opening at all in the barriers. Drywall goes on after that.

If you do EPS on the outside, it will need to a lot thicker to be considered a vapour barrier

Everything I've read about how a radiant barriers work is that they require an air gap. I'm not certain that adding the foil layer did anything for you.

Ahhhh, good sir, but there is an air gap....1.5" between the radiant barrier and the drywall....

The situation you describe is a code violation in MA. 1" of XPS is a class 2 vapor barrier and the foil is class 1.

I'm not familiar with the MA code. What is the definition of a class 1 and 2 vapour barrier in MA. And why would a radiant barrier be an issue (or maybe it is not, by itself)?

The sandwich, I expect, is the problem so if you have a semi permeable outer skin and a proper barrier on the inside, is the code satisfied?