I am remodeling a room in a house built in 1960, I removed the old ceiling and am now left with a bit of a dilemma. There is a space of 7/8"-1" between the top of the wall and the roof joists on 2 sides of the room - the outside walls. My question is this can I use 5/8" drywall and have a plasterer fill in the 1/4" gap (I am having the walls replastered - a lot of cosmetic damge to the old finish)or should I use a double layer of 1/2" drywall?

why not set a laser spinning to find true level, and sister some 2x4 to the "high" rafters down to true? then you have an uncomplicated ceiling refinish.

Or use crown molding.

swschrad and jaybee thanks sometimes you just need a new pair of eyes or 2. I always wanted to play with spinning laser, nows my chance. Happy New Year to you both.

Have you figured out what caused the old ceiling to fail?
Undersized joist, no blocking between the joist to keep them from moving or twisting, if it's an attic above not having a perlin. Over loading it with storage when the attic was not designed for it, Are all common reasons why ceilings fail.
What's the reasoning for going over it with plaster? That would just be one more thing to fail again and will gain you nothing.
I own a self leveling lazer but have never used it when redoing a ceiling.
A simple piece of brick string pulled tight works fine for this.

hi Joecaption, the old ceiling didn't fail, I was renovating the bathroom and attached walking closet, when I pulled out part of the dropped ceiling in the bathroom (wanted to go back to full height) I noticed some old termite damage to some of the rafers, so thought it prudent to pull the entire ceiling out to make any repairs to the rafters as needed. I was goung to have two walls replastered as they were part of the exterior walls of the house (remodel to addition) and over the last 50 years they are chipped,gouged,lumpy etc. so I just wanted to start out with nice smooth walls.