We have developed small blisters on inside wall. Sure it is caused by leak in roof seam. Blisters are probably water and or mold. Any fixes short of removing/replacing the wall paper??
Fred, seal the moldings around the roof and check the windows, they too may need sealed. Those blisters usually mean more than just wall paper. I hope you are lucky.
Charlie has given you some good advice. Take out the window on the damaged wall. This will give you a good idea as to the extent of your damage. Back post on how to do this. What is your make and year of HiLo? Worst case you have to rip out the entire wall and replace. I have done this. Post pictures of the damage so we can better help you.