Little buggers are persistent. Cleaned the house and within 30 minutes they are picking up the old nest material and putting it back in the house. Finally decided enough was enough. Opened the birdhouse and 3 sparrows flew out. Took the birdhouse down and found an old wasp nest inside. Going to put a v3 in tonight like the other bluebird house and when I see a sparrow inside, the siren will scare it out. Hoping conditioning will eventually keep them away.
As for the wasp nest, I read if bar soap is applied to the roof of the birdhouse, it will be too slippery for a wasp to attach a nest.