Popped drywall nails and screws are common in old and new homes alike. It’s tempting to just pound the fastener back in and fill the divot. But this is a short-term solution. To permanently fix the problem, drive a new nail or screw to reattach the drywall to the framing and remove or bury the old fastener. Don’t be scared off by the extent of damage in the photos. This is an extreme case where the nail pop was made worse by an overzealous drywall installer. In situations like this, the crushed drywall must be removed before you fill the hole.
We used lightweight spackling compound to fill the damaged area. It dries quickly, doesn’t sag and is easy to sand. Expect to apply two or three coats to cover a hole this large. The drying time between coats will depend on how deep the hole is. Use a fine sanding sponge or 100-grit drywall sanding paper to sand the patch before priming and painting.