After 3 months of tedious back-and-forth and filing for various permissions and permits, we have finally started demolition - what a huge relief we are moving forward!
With the dividing wall (between the previous bedroom and living room) and the 'attic' housing the old AC unit taken down, we have a blank canvas to start from scratch. It's amazing how much space we salvaged just by taking down the 'attic', and moving the AC unit to a smaller housing and routing it through the new mezzanine floor.
See the picture and check out the old monster AC unit (still to be taken down):
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