Lath over foam

My question is:

Half inch CDX plywood was put around the entire house. The windows were then placed. Then lath/tar paper will cover then entire exterior. Then two inches of Celotex (polyisocyanurate) board insulation will cover the entire exterior. This is the kind with the foil facing on both sides. Then chicken wire. Then I have a choice of three coat stucco (scratch, brown, color), two coat (brown, color then electromeric paint), or synthetic stucco.

I am leaning toward the two coat system. The one coat (synthetic) turned me off because you can not only jam a pencil right through a house with this installed but the problems associated
(I.E. doesn't let house breath (wood rot) and the cost exactly doubles).

The two coat sounded better because of the electromeric paint. If I ever get tired of the color, I just paint the house. The other benefit I believe is that it is flexible and would cover most hairline cracks. The last real benefit is that it is less weight than the 3 coat system. I would worry about a heavy three coat system hanging two inches away from the plywood wall. Might bend or pop the nails holding the chicken wire.

Well, on to my question: A friend built a similar house. Only he used OSB plywood over his entire house instead of CDX. He then put 2 inches of Celotex insulation and then had a three coat stucco applied over the entire house. Well, the entire house cracked. I mean there were huge cracks at every stud (or where there were plywood joints). To make matters worse, the city
came out and removed a 4 foot by 4 foot section of wall to investigate the cause. Well, they could not find ANY cause. The stucco installer (who has been doing this for over 35 years) blames the fact that the builder did not leave gaps between each sheet of OSB on the exterior of the house. Something I guess is suggested with OSB and not CDX.

Since my house is so similar, I am concerned.
I have the following theories but?

1. Did they let the wood framed house dry for at least 30 days to let the house do all its twisting and warping prior to stucco?

2. Did they let the house sit for 30 days after the scratch coat?

3. Did they do a bad mix of stucco.

4. When they cut out the 4x4 section of wall, they saw that the chicken wire was embedded a little into the Celotex. I remember the days when nails with cardboard was used and the nails stuck out about 1/4 inch and you wrapped wire around it. This way the wire was embedded into the stucco. Chicken wire just kind of sticks to the bottom of the stucco. However, I have seen a lot of homes just like this with Zero cracks.

5. This is the one that concerns me the most. Did the fact that dow blueboard was not used be the problem. Blueboard has dimples and grooves for water and stucco adhesion. In fact I have seen stucco pulled off an existing stucco wall and the foam will come off with it as though the stucco had chemically bonded to the blueboard. I assume this would not happen with a stucco, foil faced insulation material (Celotex). This might be bad?

6. It was not summer here when they stuccoed this house so I believe lack of moisture during curing was not a problem

Do you have any suggestions? 

The truth is, the only house we have ever done 
with foam insulation is this art studio: 
(at the bottom) 
http://www.rtbullard.com/stucco/pebldash/pebldash.htm 

There isn't a single tiny crack in the whole thing, 
after 6 years. Coincidentally, the guy who built it 
is from Arizona. We never have any cracks on 
pebble dash, either. 

The fact that the cracked up house had the stucco 
mesh embedded in the foam is probably the real culprit, as well 
as inadequate fastening of the OSB, and more than likely 
inadequate fastening of the lath. 
I think you hit the proverbial nail on the head with leaving the spacer between 
the lath and the stucco. This was done with various 
methods on old houses. The better the lath is embedded in the mortar, 
less less cracking you can expect. We use self furring diamond mesh lath 
only for stucco. The lath has punches every 3" to hold the 
lath 1/4" from the wall. The baggier the lath, the less cracking. 

Self furring diamond mesh lath. Punches or "furs" are 1/4"
deep and spaced 3" o.c.
The gallery we did had lath, expanded metal lath, self furring, 
attached with screws an big plastic washers. The total thickness 
is about 1 1/4" with pebbles- probably twice the weight of conventional 
sand stucco. I was by there 2 months ago to plaster a room 
across the street and there still isn't a single crack. 
The house (gallery) did sit a long time before we did the 
stucco, and we stucco in cold weather, between 32-40 degrees. 

I think on the cracked up house if the lath was self furring, 
or spaced 1/4" with spacers, and the lath was attached 
with screws and washers, you wouldn't have nasty cracks. 
With screws, you can pull the lath tight, and stop. Nails 
would tend to go right through the foam. Screws take longer, 
but if you do better work, so what? 
 

We let the scratch coat sit 2 days. The mix was probably 
OK. In 120 degree weather in the hot sun, damp curing 
is probably an impossible dream 
I think  OSB is better than plywood for preventing cracks. 
I plan to write an article about sheathing in the next month's 
stucco news. 

I don't do the new 2 coat( or what some people call 
1 coat stucco). Here it is done by the same people 
that did EIFS. I think elastomeric finish traps water against 
the wall a rots the framing, but you probably won't have this problem. 
Also, the finish looks fake, because it is fake. 

I have discovered ways to cut down the cracks to none or at 
worst very few, the biggest improvement is in the 
way we make the finish coat material. 

35 years of experience doesn't mean a damn thing to 
me if someone doesn't continually strive to do better work. 

I plan to publish our 12 point method for limiting cracks this 
month, except maybe the last 2 points, our secret finish. 

Thanks a bunch. I think you may have solved my problem.
Galvanized self furred Diamond mesh lath is the answer. Why
didn't I think of that. If I use that, I won't have to worry
at all about the stucco not adhering to the foil covering on
the Celotex. Your idea of screws with plastic washers is the
perfect solution for the 2 inch foam I am using as well. By
NOT using nails, it won't be smooshed into the foam but just
be firm against it.

They used diamond mesh on one of our city buildings and there
are zero cracks in that building but yet no one I talked to
thought of it. Maybe because Diamond Mesh is usually only
considered for commercial applications.

I suspect though, that the two coat stucco might not cover the
diamond mesh (not thick enough). I might have to go with the
3 coat to get the thickness. I'll find out tomorrow.

I like the idea of having the foam between the sheathing
and the lath. It should cushion the stucco against movement
in the plywood, like my durock idea that worked. See the monthly
column on sheathing