How can I fix the problem shown in the following pictures:

http://imageshack.us/photo/my-images/69/badcinder.jpg/

This crumbling cinder block is right next to the side door of a
garage. Some of the door frame can be seen inside the hole but there
is also some of the cinder block left on the door side of the hole.

The block has (had) a ~1/2" skim coat inside and out, but most of it
is gone on the inside and it's crumbling next to the door on the
outside (look below the hole).

If I built forms inside and out, could I fill the area with concrete
to fix it? If so, what kind of concrete would I use? What prep to the
rest of the existing block would be required?

If it helps at all, replacing the door would not be a bad thing for
this garage, so if ripping out the door frame would make the repair
easier, I will do that.

Thanks for any suggestions.