It would suggest tearing out the drywall around the window since applying casing (the moulding) will be easier with a standard size window casement to nail to. This will also give you the proper reveal (I use 3/16" reveal from edge of casement to edge of moulding). Tearing out the drywall should be fairly easy, use a utility knife to score just outside the metal drywall corner (about 3/4" from edge) of window opening. Use a Wonder bar to pry off the metal edge and the drywall, since your moulidng will cover about an 1 1/2" of the remaing drywall on the wall, be carful not to damage outside this area to avoid additional painting and drywall repair.
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