It's confusing why they would re-side the house if there's good lap siding underneath. Does it appear that the house had been added on to? If it had then that addition wouldn't have any siding underneath the asbestos shingles and you'd need to side that part of the house.
Wood siding is really pretty easy to do, just really expensive anymore unless you use the cement board or press board stuff which would defeat the idea of restoring the house. I'm in the process of restoring my house too. It was built in the 1850's and needed lots of siding replaced. It's tough because they don't even make the right size siding anymore. I have to buy the full side cedar stuff. Cut it down the middle and throw away about half of each piece in order to match the width of the original stuff.
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