Plane down the worst of the warped ceiling joists with a hand planer. Run the planer over the boards to remove shavings of the wood. Check with a level to see how much progress you are making. Do not remove more than 1/4 inch of the wood.
Install furring strips, often called strapping, horizontally over the ceiling joists. Nail the furring strips across the joists, using one nail per joist. Use your level as you work to determine how far off each joist is.
Insert shims as necessary under the furring strips. If a joist is warped upward, insert wood shims between the furring strip and the joist to build the area up. Check for level and add or take away the shims as necessary.
Hang the Sheetrock on the furring strips. Have a friend help you. Sheetrock panels weigh in excess of 40 pounds each. Drive drywall screws through the panel, into the furring strips. Continue until all of the ceiling is covered. If you have to trim the Sheetrock, score the back of the panel, snap it and cut away the paper with a utility knife.
Tape over the seams with self-adhesive drywall tape. Press the tape firmly into each seam.
Apply joint compound over the tape and the screw marks on each panel. Scrape on the compound with a drywall knife. Smooth out the compound as you go.
Sand down the joint compound with a fine-grit sanding block. The entire surface of the panel should be smooth to the touch. You can now finish the ceiling with primer and paint.