Worst case senario is skin over w/ 1/4" wallboard. You will have to extend out electrical and possibly door jambs/trims, but might be worth the effort over trying to cleanly remove the existing.

You might try getting a steamer and see if it will loosen the paint, mud, and wallpaper, but i think that's asking a lot of the steamer. Might be worth a go.

Use a paint roller and apply water to about 1 sq. yard at a time (may take 2 or 3 applications per area). Allow water to soak into mud then scrape off the mud with a 4"-6" joint knife. Time consuming and very messy.

We had the same situation in two bathrooms in the house we bought 2 years ago (what were they thinking!?!).

We were able to use a scraper/putty knife to get under the "mudd" and pull it away from the wallpapered wall being careful not to gouge the drywall underneath. Then we used a water/steam method to remove the wallpaper. A little time intensive but actually not as awful as we expected.

Good luck!

To anyone else reading comments now:

1) get an oscillating tool (doesnt gave to be expensive, i think mine was $50 from harbor freight. trust me, its good to have one at home anyway)

2) get the flexible scraper blade for it

3) go to town

4) enjoy not getting the desire to set your house on fire because youre working with a manual scraper