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When I sheet out the floor do I need felt between both layers or just between the finished floor and the plywood? CDX is the plywood grade I want to use? The X is only to indicate the different type of glue for exterior use correct? It isn't treated, that would be bad since it is wet.
Do I need to check the moisture of the 1x8's before sheeting out with 1/2"? Or do I just need to sheet out the floor then monitor the moisture levels in the plywood?
No need to install anything between the subfloor and the plywood underlayment. CDX works fine for hardwood flooring underlayment. C and D are the grades of each side and X does signify that it's made with exterior glue and can be used in an exterior application. Some prefer higher grades. You'll pay dearly for higher grades of plywood and my opinion is, if it's being covered, who cares what it looks like. You can check the existing subfloor for moisture before sheeting with plywood. It's probably a good idea. If you have a crawl space, you MUST install 6 or 8 mil polyethylene plastic on the entire ground as a moisture vapor barrier. Most big box stores ( who have the best plywood prices ) store the plywood indoors ( so should you ), so the plywood ( unless improperly stored ) most likely will be in the normal moisture content range, which is around 10%.