Sounds like your best bet is to rewire. Since your house is a rancher, if the attic has no floor in it you can rewire the majority from above without too much tearing the house apart.If you need to remove the drywall to insulate then that would be the way to go. I would suggest you get a book on basic wiring to help you along with outlet spacing, wire sizing, SMOKE DETECTOR placement, etc. Check your main service for size and condition. You will want to add circuits in your basement/shop so if you need to replace an older box, get a service increase while you are at it, 200 amp minimum, based on your requirements and future plans. Around here we require permits for this type of work that can only be issued to licensed contractors, some areas have homeowner permits. Either way if permits are required for the service, get that taken care of first before you start to remodel. If you rewire first w/o permits you could have trouble getting your power company to hook up the upgraded service.If you are lucky enough to be in an area that doesn't require permits, then between you and your father-in-law, and a little research, you should be able to fight it. If you have any questions, take some pics and PM me I will answer what I can. Troubleshooting problems are a hands on type of thing.BTW I have been in the trade since 1977, had my own business for 20 years and have been an inspector for the last 6. I have seen some unbelievably bad installations, usually from the "profesional" types who were in way over their head. People with little or no mechanical ability. As I said earlier, you guys should be up to it. Good luck and take your time with it, there are no good shortcuts when it comes to electricity!