Lynn - spray with a chlorine solution to kill the mildew. Pressure clean this off.
After the siding has dried (I would give it 3-4 weeks) Apply one coat of oil primer. It will stick to the solid oil stain - no problem. A latex primer should too - but I'd go with the oil - less likely to have a problem.
Once that is dry - TWO coats of topcoat - and you are all set......
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