Did you scrape out the old caulk first and then clean with a solvent so that the new caulk would seal?
All older trailers not just HI-LO's have the same kind of problems with water damage. There are some threads in the forum where they repaired the walls, do a search. The big problem is that some HI-LOs are all wood including the framing, some have metal frames, The cables pull out of the top part of the all wood ones when they get bad water damage. The new HI-LO parts and repair place that just opened claims to have bought all the records and manuals, they may be able to tell you if yours has a metal or wood framing. Again search the forum for there contact information.
Here is another place for parts and repair. http://www.jrrepair.embarqspace.com/