In terms of dealing with the old developer’s mess… I don’t know. But if you want to make a child theme in order to protect your future changes from being wiped out from updates, it’s easy:
First create a new folder in wp-content/themes and call it whatever you want. Next create a file: style.css and place the following code at the top:
/*
Theme Name: Your theme name
Author: Your Author
Author URI: Your Author Website
Template: twentyten
Version: 1.0
*/
Template: is going to be the name of your parent theme. You can find the official name (it’s case sensitive) by looking in the style.css of the parent theme.
That’s the minimum you need to setup a child theme, and you can now go to appearance -> themes and should be able to find your theme.
Now you can simply copy the template files from the parent theme into your child theme folder and make the necessary modifications. If a file is present in both child and parent theme, the child theme will override the parent. If a required theme file is missing in the child folder, it will simply use the template from the parent theme.
For more, see: http://codex.wordpress.org/Child_Themes