Just Google it - there's some really good replies from Boat Design and some guy rebuilding his Cal 2-29 (really good pictures). I looked it up yesterday.
I spent the better part of yesterday afternoon trying to google this particular thread, and looking for it on BoatDesign.. I found a really informative one on a guy with rot and termite problems on a Cal 25, but not the one you mentioned.. Care to link an obviously poor googler up?
svHyLyte: The pics are deceiving. The bulkheads rotted from the bottom up because of some previous standing water in the boat (thank you PO!). The damage on the port side is what you see aft looking forward. If that's all there was I'd do what you suggested and just cut out the section. Unfortunately, when you look at these from the bow looking aft, they're completely delaminated and spongy from the bottom to about 6-12" from the headliner, depending on the spot. Above that is solid, but without more solid material to work with I'd rather just replace the whole thing.