Mix a powdered oxygen bleach product with water in a plastic bucket according to the manufacturer's directions. Apply the solution to the T1-11 wood siding with a long-handled scrub brush. Scrub the siding from the bottom up, then rinse thoroughly with a garden hose and spray nozzle. Allow to dry for at least 24 hours.
Remove any peeling paint with a paint scraper. Sand around the edges of any remaining paint with a 50- to 80-grit sandpaper.
Apply a penetrating epoxy sealer to the surface and exposed edges of the siding with a paintbrush or roller. Pay particular attention to the sides and edges of the siding, since water can wick into the wood and delaminate the layers of plywood. Allow to dry for two to five days.
Repair any holes or deep cracks in the siding with an epoxy filler formulated for wood. Apply with a putty knife, smoothing the top of the patch. Sand lightly when dry to blend the patch with the surrounding wood. Wipe with a tack cloth to remove all dust before priming and painting.
Caulk around the doors and windows before proceeding to paint. Remove any damaged caulk by cutting the edges with a utility knife and scraping clean with a putty knife. Apply an exterior-grade, flexible, paintable silicone caulk and allow to dry.
Prime the T1-11 siding with a high-quality oil-based primer. Roll the primer onto the siding with a medium-nap roller. Paint the grooves in the siding with a paintbrush. Allow to dry according to the manufacturer's directions.
Apply two coats of a high-quality latex paint to the T1-11 siding. Paint the grooves with a paintbrush first, then roll the paint over the entire surface of the siding. Allow to dry before applying the second coat of paint.