They must have been in some kind of hurry for privacy, because they didn't even remove the curtains before they closed up the window and tiled over it. Here's what i found during the demo. Okay seriously, who does this?
After replacing the window with a new frosted double hung one from Home Depot, i framed up a little shelf which will hold all of my wife's lotions and potions, i re-insulated, installed new vapour barrier, cement board and a marble shelf, then i tiled the heck out of everything. Et voila!