I was doing some repair work in the finished basement which involved
removing lower part of drywall. This exposed a perimeter gap of about
1/2 inch all around the floor slab which was filled with strips of
black cork-like material. This material apparently absorbed the
mosture from the ground soil in many places and had to be removed.
What do I do now? Do I fill the expansion gap with polyurethane caulk
or can I put DryLok type hydraulic cement to permanently seal out any
moisture?

Anyway, what is the purpose of this gap? Was it just to prevent
problems during curing or is it still needed now? Will I cause
structural problems if I fill the gap with cement? The house is 20
years old and the floor slab is in perfect condition with no cracks.

Thanks,
David