Drywall repair along top of shower enclosure advice sought

Have some damage along the top of a shower in a newly bought house.  
 

looks like there was some prior plumbing issue as there is one of those large blanking plates where the valve is plus dry water/mold evidence under the floor in this area. 

the damaged area was dry per inspector. 
 

so I pulled all of the bad stuff off and it was mostly mold under the paint and on the drywall. 
 

I had to leave before cutting it out but this is where it is at:

it looks like they ran the drywall to the top of the enclosure but not down to the top of the shelf.  They had wadded up paper towels below the drywall and filled the gap with plaster.  
 

there is also some plastic back there that seems to end at the shower enclosure. 
 

I'll photo dump here and hoping that paul and others can tell me how to fix!

Why me?? 

That looks like standard drywall (not moisture resistant).

Drywall should not sit directly on that fiberglass ledge. It should have been MR drywall, left a gap, and filled it with caulk. 
 

Looks like the drywall is wicking the water up from the fiberglass ledge. 
 

Cut it out around the tub surround, kill the mold, replace with MR board, leave gap, and caulk. Should be good to go. 

This is why I usually run cement/fiber board and tile all the way to the ceiling when I've tiled showers.  Not much more work/cost, but this never happens.  

Thanks for the replies!   The little plastic barrier back there....  should the 1/4" of overlap be between the drywall and the enclosure or behind the enclosure?

and any thoughts on how to get a reasonable blend to the textured skim coat??

I wonder about adding another couple rows of tile on that wall, up past where the shower head sticks out.  There may be some spray from it going back against the wall, getting the drywall wet.  Otherwise do what SV reX said.

In reply to stuart in mn :

I don't think that is tile. I think it is an imprint in the fiberglass surround that looks like tile. 
 

Tile could be added, but it won't match

In reply to jfryjfry :

The plastic appears to be a bad attempt at a moisture barrier. It's garbage- it's not doing anything. 
 

I don't understand your question about the 1/4" overlap

Paul et al!

the plastic hangs down about 1/4" below the top edge of the shower enclosure so I wasn't sure if I should put it behind the fiberglass or in front.   I guess, based on your statement of it being useless, is irrelevant.  
 

Which is comforting because I couldn't tell what purpose it would serve, and figured it must've it was there. But I guess not!

I did manage to finish the job. I might've had too much of a gap between the new drywall and the shower at about a quarter inch, but it didn't seem to be that bad and clean up nice. The texture of the drywall was intimidating as I don't know how to do that, but I got a pretty close version of it. And the benefit, which is probably why they do it in the first place, is that there was hardly any sanding needed. I hit it lightly and quickly just to take some of the rough edges off and otherwise did not need to sand anything.

at first I was Just going to take off, maybe the bottom 4 inches. But when Paul pointed out that they didn't use the right drywall, I took off most of the wall. I'm glad I did as you can see there was mold that had extended up quite a ways.

mid project:

I didn't get any final pics but will soon

also of note, there was no sealant on the shower head pipe where it threads into the wall. What a joke!  That might have been the problem. 

Looks good!

Sealant around the shower head pipe is probably a non-issue. They all bend down... it would be really hard for that to ever leak. 
 

Glad it worked out. 

Green board is good but I would have been tempted to use concrete backer board.

I use concrete backer board in direct wet locations (like low areas IN the tub surround) and green board in damp and humid areas (like the entire rest of the bathroom and ceiling).  I've been doing it that way for 35 years and never had a call back. And if he had used concrete backer board, he would have had a tough time making it a paint grade surface. 
 

I think it will be fine.