For a cheaper, faster and possibly easier option, take a look at this for some inspiration. The lighter colour of the walls may reflect more light and be a stand out feature of your home. Click on the link and scroll to the image of the polished timber floor with the timber wall and ceiling. Polished timber floors with timber wall paneling

I remember that trend from the 70's.

They look like cedar lining boards, possibly with secret nailing. Needs accuracy, precision and craftsmanship to fit them perfectly between floor and ceiling without any skirting or cornince. Dr Retro of Dr Retro House Calls and Dr Retro Virtual Visits

"Believe me, if money was no option I would put new vj over it!" "I wasn't planning on changing the orientation of the grooves," Thanks Alison. Keeping the tight budget in mind I was looking at those two lines. I got wanting to update the look or tone down the colour, but thought if the grooves and their orientation aren't really a problem why fix it? Though reading back I see I missed there were consecutive replies and in the previous one Tania said she wished they were vertical or horizontal. Diagonal isn't on trend right now but wait lomg enough and it will probably will be again. I don't think it's a simple matter of vertical or horizontal, the choice of which could affect the room because anything striped has an effect. Maybe even a mix, one on the forward wall and the other on the receding walls? I like your suggestion to reuse the boards. It might need a few extra boards by the time they're cut and moved but it would achieve the desired result with less cost and wastage and I suspect it while it's not a small job it would still be easier than all that gap filling and smoothing.