Thats not drywall. Thats plaster, over lath. You may want to look at this video. https://www.youtube.com/watch?v=t4oI2SsOAC4

Look up some old episodes of 'Ask This Old House', they show how to repair plaster lathe. Basically, remove the loose plaster back to where it is still secure, cut out a patch of drywall to fit, screw the drywall patch in place, then mud & tape the joints and finish.

Thank you all!