A pressure washer is a common tool used to strip an old finish from cedar siding. This method also refreshes the wood by removing dirt, grime and cobwebs. A pressure washer that operates between 1,500 and 2,000 psi is ideal for this job -- anything more powerful will damage the wood. A 25-degree nozzle releases a strong enough stream of water to clear away dirt, but a 15-degree nozzle is better for stripping the wood.
Depending on the finish, you have a few options for solvents that will strip the finish from the wood. Mineral spirits work on most finishes, including paint and varnish. If the cedar siding was shellacked or lacquered, denatured alcohol is your best bet for stripping the old finish. No matter which solvent you use, they are applied the same way. Apply a small amount of solvent to a cloth, then blot the siding with the cloth. Let the solvent soak for 10 minutes, then scrub the finish away with a scrub brush or steel wool.
Sanding wood is one of the more common ways to strip an old finish, but it can be labor intensive even with a powered sander. Sanding is almost always a two-part process because you have to sand once to strip the finish, then sand a second time to smooth the wood. The first pass should be done with a medium-grade sandpaper, around 80- to 120-grit. The smoothing process requires a finer grade, around 200- to 220-grit.
If your only issue is that parts of the cedar siding have been stained by water, which typically leaves darkened spots throughout the wood, oxalic acid is your best bet. Even if you sand, pressure wash or use solvents, you may notice some dark spots in the wood where water has soaked through the finish. Oxalic acid is commonly used to bleach wood because it neutralizes the tannins in the wood, returning it to its natural color. Oxalic acid should be mixed and applied as directed by the manufacturer.