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Most homes built with T-111 for siding have no underlying sheathing. The T-111 serves as both structural sheathing/shear panel and siding at once. When you get it off, you have no resistance to racking in the wall. It could tilt off plumb.
By pounding with hammer on the cats paw, you introduce lots of vibrations to the wall and the fasteners holding drywall to the inside of the same studs might pop little flaws in the interior walls, adding more repairs to your already cumbersome and dangerous job.
In situations like this, it is better to retire the T-111 to an underlying sheathing status and go over it with a layer of new siding IMO. It can be same or vinyl or cedar shingles or Cement board or whatever.