Hi Chris,
I have a consulting company and run a deck waterproofing advice site at
www.deckexpert.com. I am also a contractor, my specialty is waterproofing plywood decks over living spaces and we do apply decorative finishes to them as well. Here's one of a Desert Crete decking system with a faux flagstone template and then stamped...
First I have to disagree with your statement that transition layers such as mortar beds or cement board is mandatory when transitioning from plywood flooring/decking to a cement based overlay. There are many manufacturer's of cement and lath based decking systems- some of whom have taken the time trouble and expense of testing their materials under ASTM protocols at laboratories that are credentialed/approved by ICC-ES/UL etc.
None of these manufacturer's, if you spoke with them would tell you to install a mortar bed or cement board on or under their systems. We can use their cements to slope a deck to get a 1/4" per foot of fall as all low slope roof decks must be sloped to drain and meet code requirements.
If you read a couple of the reports, you'll see there are two basic premises for assembling these concrete based systems.
The less expensive/less labor intensive systems are assembled after flashing the deck to wall and deck edges and installing a door pan. Once that is accomplished, the system is assembled by stapling 2.5# galvanized flat metal lath down, troweling in a polymer modified cement, letting it dry and then troweling on a secondary layer of modified cement and then finally a finish whether it's a simple knockdown pattern or a faux tile finish.
One thing I do see in the decking/waterproofing industry is the methods manufacturer's use to gain applicators. Several use "training sessions" at the White Caps, decorative concrete wholesale stores etc that are open to anyone and everyone who is thinking about becoming an installer. Big profits, easy solutions, spend 3 or 4 hours watching us ...and bada bing bada bang, you're an applicator. Other firms use the approach of approving applicators who have experience and verifiable licenses insurance and staff. In your case, only God knows what type of actual experience that a applicator had, but I don't have good vibes as it stands h=judging from the pics. A prime target of some firms for new applicators of their waterproofing systems is to find decorative contractors who are looking to add to their repertoire.
The more expensive systems utilize a resin and fiberglass layer over the lath and base coat, then a screed coat then texture and paint or a faux finish can go on. Desert Crete, Pli-Dek, Excellent Coatings are a few who utilize the fiberglass/resin as a standard assembly method.
The key to any of these deck systems lasting, aside from inspecting and maintaining/repairing as needed, one is that the framing/substrate system HAS to be installed to the highest standards possible. That means using 1 1/8" plywood instead of 5/8" plywood (which is the minimum allowed by most manufacturer's, subject to intended use) over 2x10 or 2x12" joists 12" OC instead of 2x8" joists 16" OC. That means sloping the deck in the framing and well, there's so much to know I did a 2 hour powerpoint seminar on the subject at JLC LIVE in Portland in December and will do the same in Providence RI in March this year...
This is the link to my dropbox JLC presentation if you'd like to download/view it.
Once the deck system is built using the best possible construction methods and materials, then the waterproofing contractor needs to install his/her system to the highest standards possible as well.
I make my living off fixing my competitors mistakes and see failures almost everyday. It is entirely possible that the system in place is in fact a bonafide deck waterproofing system. Without seeing a contract/proposal or manufacurer's literature, I just don't know.
Looking at the pictures and reading your article points to a few possibilities as to where the water intrusion issues started. The first pic with the edge shows clearly that there is no drip edge flashing terminating the coating. Instead the installers mistake was to return the decking/faux finish down the fascia. The expansion contraction of the different wood materials would eventually split the coating just like it has.
In the same picture, the railing penetration is immediately a suspect too. Often when we demo these failed decks,blocking under the railing penetration is usually non existent or done so poorly that the wood has split or been driven down as to be useless. We hate penetrations in decks, because that's usually where they leak, eventually. The railing post will move when leaned on; even though railings must hold 200#s, they always move, creating stress and cracks in the materials.
You are correct, OSB/chip board etc for exterior decks is a big no! Aside from the issues you mention OSB is not approved by any manufacturer for use under any deck system that I know of. As many of these concrete based systems also have a Class A fire resistant rating as a roofing system, they have to use plywood as a condition of that fire rating approval.
In the other pictures I noticed right off that the column on the step above the failed area appears to be in direct contact with the deck, without a weep screed breaking the stucco drainage plane from the deck. I also see a railing connection through the faux finish area as well as at the step (cant tell if it's the same area or a different one).
I concur with your assessment that the whole deck be torn off. Any repair attempts would be just that, repair attempts and leaving unknown materials and substandard materials in will just leave a ticking time bomb of when/if it will fail questions.
The owners of the home need to find 3 trades, a highly comptetent framer, a highly competent waterproofer and then a highly competent faux finish concrete decorative applicator.
Here's a couple links to some Desert Crete jobs for you to read...
Thank you!
Bill Leys-The Deck Expert
NEW PAPERLESS FAX # 805-856-1528 (by Hello Fax) 
