Thank you, everyone for the feedback. Milgard, JenWeld and a few others are well regarded by all the contractor and homeowners who I've been able to talk to. The 2 contractors who came by in the last couple of days who work on siding, trim and windows have all said that the windows are good and that the real problem was that water got to the trim (but no apparent siding issues right now). The trim pieces are pine, which is being phased out in the PNW because of the heavy rain issues we have. The costs are moderate to replace all the pine with cedar, so that's what we are going to go with. The second story windows have small ledges (don't know the proper term) that seem to trap the water and may contribute to the problem that we have, so only the second story window trim facing into the weather really are affected by this.
We hope to have this problem completely fixed by the end of next week. Looks like the total contractor time will be no more than about 8-10 hours.
It made a world of difference getting in highly recommended general contractors who specialize in this as opposed to companies that specialize in selling replacement windows. I should have known that up front and definitely know it now
One more siding/trim/window specialist contractor coming today or tomorrow to evaluate and give a bid and then we'll make the decision and git 'er done!