We have a solidly built playhouse in the backyard, which is leak proof and dry. Can we use this on top of the existing plaster walls and ceiling?

The only problem we see is that the humidity can will affect the panel as they are wood based. With a higher humidity rate, the panel will expand and may buckle on the wall. If you are installing it, make sure you apply a construction adhesive on the back and carpenter glue in the seam and don't forget to leave a gap in the corner for the expansion. That way you will leave room for the panel to expand. The best result will be achieve in stable humidity condition between 30 and 50%. Thank you