james wrote:
The 25 year old faucet in my backyard is near failure. It squeaked
when turned and it's not a metalic squeak, but
twisting-the-cork-off-a-bottle kind of squeak, and water drips out of
the handle at certain point. I have managed to adjust it so that
water is shut off and is not dripping out of the handle.

This sillcock goes into the house in between a wall. On one side of
the wall is a kitchen cabinet, on the other side is the living room.
I have to choose one of the walls to cut an opening for repair.

http://www.smugmug.com/gallery/12296239_88hEN

On the cabinet side, the height of the pipe is 1 inch from the middle
shelf, and the shelf is not made to be removable. Even if the middle
shelf is removed, it would still be a tight space to work in.

On the living room side, it is easy to cut the hole to work on the
pipe, but repairing the drywall may leave a sign of repair due to
slightly mismatched paint and texture.

Any words of wisdom?

I had a similar problem. All I wanted to do was replace the ordinary faucet
with a 1/4-turn ball valve. I put the wrench on the faucet, turned, and the
pipe collapsed! Turns out the mortar had EATEN into the galvanized pipe!

I ended up chiseling out about seven bricks to gain access to the "T" that
served the faucet. I replaced the 8" pipe leading to the faucet, covering it
first with a 1/2" thick rubber boot, and re-mortaring the bricks I had
removed.

Checking, lo and behold, the same nastiness was affecting another faucet
service. Refurbished it the same way.

About a 200-curseword job.

Therefo
1. If access from the outside is possible, you won't have the dilemma about
which you are worried.
2. I strongly suggest the 1/4-turn ball valve faucet as a replacement. They
cost more, but there's far less that can go wrong with them.