See those red flags around you yet? You have found evidence of water
infiltrations already. I presume you have gravity at you house. If water
is in the dead space below the existing tile, it is quite likely to have
infiltrated below the mud bed to the decking and structure underneath,
unless there is a liner underneath. Can you see into the joist bays
below, or is this over finished space? Any evidence of dark spots or
drips under the shower?

This is Florida and it's a block house, everything is built on the
slab, no floor joists. I guess I am still trying to get a handle on
how this was constructed to start with. The floor in the shower
(above the tile) is still several inches below the bathroom floor
(main slab) level. From what I see there would of been a membrane put
on the slab, then mud on top of the liner, then tile on top of the
mud? Guess I'm not clear about how you tile on top of the mud :O/

Personally, as much work and money as you are putting into this project,
I'd demo it all, and build back with a proper pan or membrane or
whatever, and seriously consider paying a pro to do the wet areas. A
shower is a lot less forgiving than floors in a kitchen or entryway. I'd
rather pay a little extra and never have to think about it or mess with
it again. Houses, and showers, flex with weather and point loads on the
floor. Any kind of seal is likely to fail eventually. That is why shower
pans and membrane underlayments were invented- to make a waterproof bowl
with the only exit via the drain.

If "paying a pro" was in the budget, I'd be paying a pro. In this
economy I'm going to be lucky to pull the strings to get the supplies
to patch this together. This is going to have to be down and dirty
and as quick and easy (cheap) as possible.

Is there a "pan" that you can install and tile on top of? I hate the
thought of having "plastic" in the bottom of the shower. Been in a
few of those and looks and feels mega-cheap, cheap, cheap.... want to
try to put tile down if at all possible.