Would newly rendered exterior protect interior walls?

HI first things first, I think you are paying too much to plaster a toilet. It shouldn't take all day but you have to accept the tradesman won't get to start another job in the same day. Although our plasterers would do 3 WC's in one day. Regards to the plastering blowing and damp reaction due to the render, sounds like to me the walls are trying to breathe, but they can't because they have been rendered badly. If it is an old house build with lime in the brickwork, you should never render it. As it does not have a cavity to allow for breathing. Also you have to be careful about new plaster internally. This will cause the walls internally to sweat which will look like damp. If you do have a cavity and damp is appearing internally it is one of two possibilities. 1) the DPC (damp proof course is penetrated) and rising damp is coming up, common in houses built in the 50tys and 60tys as the damp was often like tar which degrades over time, shelf life of about 30 years. This is simple to cure it needs drilling and injecting with a solution. This is a damp specialist job. 2) The cavity could be bridged internally which is transferring damp from one wall to another. Lastly if they painted the new plaster before it had , had time to dry properly this would also cause the paint to drop off

I agree entirely with Joseph construction, although condensation in the toilet can also be a problem if there is no vent, gutter felt at the roof-line could also be allowing water ingress into the brickwork behind the render if it is a solid wall construction house. It really depends on the type of property as to what the issue/solution will be. This company sounds like its causing problems rather than fixing them. Your best bet is post the job on the site and get a local expert round to see the best solution/cost Good luck Alex