The credit for the effort goes to 75-year-old Jigme Bista, the former king of Mustang.
'Mustang was ruled by the Amapal dynasty, of which my father is the 21st descendant,' said the former king's son, Jigme Singi Palbar Bista.
'It remained an independent kingdom till 1440. When Prithvi Narayan Shah, (the first king of Nepal's current royal dynasty), overran the different principalities, Mustang was annexed. However, the old palace and fort still remain, as do dozens of old Buddhist monasteries,' he said.
Once closed to foreigners, Mustang was reopened to the outside world in 1992.
Bista said: 'One of the first visitors was Richard Blum, chairman of the American Himalayan Foundation. He met my father. Mustang used to be an ancient centre of Buddhist learning, my father told him. But now, due to the snow and wind and ravages of time, the monasteries are in ruins.'
Blum pledged his support and the foundation began its work with the restoration of two 600-year-old monasteries - the Jampa and Thubchen gombas.
Besides the renovation, the foundation is also helping in the running of nunneries and day-care centres.
Later this month, Blum is expected to visit Mustang again for undertaking the restoration of at least two more monasteries.
Bista says his father was delighted with the discovery of the caves and the murals that are being likened to India's Ajanta cave paintings.
'We knew such treasure troves exist,' he said. 'Now that they are being found, Mustang should regain its place as an important centre of Buddhist religious learning.'
Located at the northernmost tip of Nepal, its isolation and inaccessibility ironically protected Mustang's historical legacy from archaeological robbery.
There are no smooth roads, electricity or telephone connections. Bista, who would have been the crown prince, runs a trekking company - the Royal Mustang Excursion.
But he says he has no regrets.
'I am a citizen of the 21st century,' he said. 'We have to keep pace with the changing times.'