Epoxy would be your best bet for waterproofness. I saw a list years ago that listed finishes by their ability to resistant water penetration and epoxy was the top choice. I think I would try to get down to bare wood though. Epoxies usually generate heat when they cure and heat is one of the best ways to remove latex finishes. If the paint job is really old looking it might be an enamel instead. It would resist being damaged during the curing process better but I'm still not sure about how well the epoxy would adhere to it. If you wanted to color the wood I would use a water based stain. I think they are more like dyes than stains. I like using a product from Quebec called Saman. I can use oil or water based finishes on top of it.
Someone I consider a master woodworker once told me that a master woodworker is not someone who never makes mistakes. He is someone who is able to cover them up so that no one can tell.