Flashing on roof

I have a question about a homes I purchased last month with an existing stucco problem:

Where the garage roof meets the corner of the house the stucco wall has developed a leak into the interior of the structure. The home is only 4-5 years old but there is an absence of kick-out flashing at the bottom of the roof/wall joint. In addition, at this point the valley of the garage roof joins the corner of the main structure causing a high volume of water to pass over this roof line. My question is this: can I cut back the stucco approximately 3" above the roof line and install a kick-out diverter and some new flashing pieces and then fill that void with a PVC trim board and install a secondary flashing over the top? Or must I cut back the stucco to fix the flashing and then re-stucco the repair? My concern is that fixing the flashing and then re-stuccoing may not solve the problem and then I have to tear it out all over again. However, I don't want to introduce a faulty system into an already complicated situation if you think such a fix would not work. Thanks.

You are right-the stucco needs to be cut back at least 3 inches or so, flashing put on, and then patched. This allows the stucco to overlap the flashing to ensure water doesn't get behind the flashing. Here are a few examples:

http://www.rtbullard.com/stucco/progress/patch02.htm