Chi
As we said in the introduction to this category, "Some times the best course of action is to strip the walls of plaster and lath, insulate them and restore with drywall". That is a big messy job but it does offer the bonus of insulation which is a valuable addition as energy prices continue to rise.
If you have a large area that has failed it is often easier and faster to replace the failed portion with drywall. A 3/8" section of drywall applied over stripped lath will quite often mate flush with an adjacent section of plaster. In all my years of doing these type repairs I have yet to find a situation where some combination of lath, shims and drywall could not be paired together to create a flat surface.
Considering the added value of insulation my personal opinion is that anytime you have to replace more than 10-15 percent of a given wall area you are better off removing the plaster, insulating the wall, and replacing it with drywall. I apply this standard to rental properties where I do not pay the utility bills. For the home you live in and pay the bills, this should be a very easy decision.
If you want to cut out just a section and replace it, you should know the math involved. Lath is most commonly found in a 3/8" nominal thickness. Plaster when applied over lath will vary from an absolute minimum of about 1/4" to a maximum of about 5/8" with 3/8' to 1/2" being the most common thicknesses. Where there was a bowed stud or other unusual circumstances I have encountered exceptions where there might be as much as an inch of plaster over the lath.
So your total wall thickness from the stud face to the finished wall surface can be anywhere from a low of 5/8" to a full inch. Assuming the law of averages prevail the most common measurement is a total thickness of about 7/8 inch.
Around and over masonry fireplaces and chimneys you may find anything from a 1/8" of hard coat applied directly to the bricks to an inch or more of substrate with the thin hard coat applied over than. Without the benefit of some minor water seepage over the years, you may find removing either to be one of the more difficult plaster removal projects you may ever undertake. Removing a section of plaster and lath or the entire wall can create problems with the depth of window casings and door jambs, so it is very important to think a few steps ahead and provide an attachment point that will flush the wall to the other house components. A few examples just to get you thinking:
You are going to need to plane the window and door jambs or build out the studs by an amount equal to the prior measurement minus the half inch of drywall you are going to install. Planning the jambs when they are mounted in place is a major PITA. Building out the wall studs is your only real option unless you are replacing all the windows and doors.
Building them out is a fairly simple process. Al the lath that I have encountered is about 3/8 of an inch thick; ripping some 3/8" plywood into 1 1/2" strips to be nailed onto the stud face is no big deal. Using scraps of drywall is also an option but you really should use longer nails or screw for the drywall installation if you use this method. I have done it both ways with equal success. I prefer using wood but either method works.