Actually I believe I have solved the issue on the outside. As
mentioned in the first post, I used to have water seeping in, but I
haven't had any since last year when I redirected my downspouts away
from the house. There's been several very heavy down pours since then
and nothing seeped in, so I'm pretty confident in that, however, I
always have a habit of going overboard so that's why I was thinking of
painting the walls with DryLok.

That link posted by DT looks really interested though, and I'm thinking
I'm going to pursue what it says there by using the extruded
polystyrene. I haven't gotten thru the whole article yet though, so
I'm not sure if that would make the DryLok uneccessary or what?

Thanks for all the responses so far,
Harry