Siding 8.25" Hardieplank over siding plus insulation...?

OK, so I'm asked to help replace some vinyl siding that was actually melted out of shape by reflections from new house next door's windows. Obviously, vinyl is not going to be an option. Sheathing is shiplap, covered with paper, then cedar shingles, then 1/2" thick foam sheets, (then vinyl siding, now removed). Shingles plus foam stand out about 1.4" max from sheathing. Pretty irregular.

House is otherwise uninsulated so keeping shingles and foam is desired for R value. My thought is to cut channels 2' on-center and lay in 2x3" battens, add some Reflectix insulation between battens, then use 8" lapped Hardieplank siding to close it up.

Pros and cons of this solution? Any better ideas?

 

Got a real mess there, do they want to do this right or just get by for a fast fix?
Has the wiring been up dated? Yes there's a reason for this seemingly unrelated question?
If it was mine I'd be stripping down to the studs, up dating the wiring while it's exposed, insulating and air sealing, sheathing, house wrap, then new siding.
That's got to look like poop around all the windows and door with all those layers.
Post a picture.

 

You will be kicking yourself if the walls are wavy and irregular. Vinyl siding hangs loose and can look fairly straight on a crooked wall. Once the cement board is nailed back tight you will then see every irregularity in the wall. Lots of layers = lots of problems imo. Plus the problem of added thickness around doors and windows.