To complicate matters the walls and ceiling are t/groove pine molding. I need sugestions on how to replace or upgrade this wiring
connected to a 60A fuse box. Want to upgrade to 200A service with 3 wire
If you find armored cable, you may be in luck. Some municipalities will allow for the armored part of the cable to act as the ground. In this case, all you have to do is replace all the receptacles with the 3-prong variety, adding a short wire from the ground screw on the receptacle to any screw found inside the metal outlet box in the wall. If the whole house is likewise wired, you can do the same everywhere. Just make sure your local codes will allow this method. Remember, if you do something not approved or without proper permits, and the house should have a fire, your insurance will not be required to pay.
If the wiring in the addition proves to need replacing, you still have options. Your municipality may allow for the addition of only a single ground wire. That may be easier than all new wiring. You could also consider adding chair-rail molding to the room or rooms comprising the addition, hiding the wiring behind it. Baseboard molding is another option. Also, if you find the floor in your addition is cold due to it being a slab, building an insulated sub-floor might provide you with some extra warmth and a place to run the new wiring. Of course, all these options depend on the specifics in your house, which I have not seen. Changing floor heights may not be practical. Maybe, if these ideas are not workable, they will at least give you something to think about, which might lead to another solution.
Now, as far as the breaker panel is concerned, the basic work should run you under a grand, assuming no major additionals. For example, the supply wires running to your house from the street may not be able to handle 200 amps, and would need to be replaced. Depending on your utility company, this may be your responsibility. Adding a ground should not be a big problem. Usually an 8‚Äô copper rod or water pipe is all that the code requires. Again, your municipality can tell you exactly what needs to be done.
I strongly advise having the main panel replaced by a professional. Usually the main panel can be replaced independently of the work needed in the rest of the home. Then, while the electrician is there, pick his brains for other rewiring possibilities for the rest of your home.