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A couple other ideas (Score:1)
This is a great read, as well as your last journal entry on this topic. I'm in a similar situation, and have come up with a couple of ideas on tackling the huge codebase with failing tests monster.
First is to chop off a piece of the application and roll it into it's own self contained module. Now this is undoubtedly easier said than done, but if you can make that happen, you've downsized the overall problem a bit, plus the it's much easier to run the tests for that module when work needs to be done on it