Man, are there are lot of different opinions about the absolute right
or absolute wrong way to finish exterior basement walls. I know that
everything depends on climate and existing conditions, so everyone's
opinion is probably valid for at least one home out there.

My hope is that I can describe my situation and see what folks think my
best approach should be.

Climate: Washington DC area - mid 90's and high humidity much of the
summer, 30's and 40's much of the winter with occasional cold snaps in
the teens or single digits. Perfect weather during the spring and
fall.

Exterior conditions: Grade level ranges from 5' above basement floor to
~7'. Known groundwater issues, mitigated with a full perimeter
interior french drain and sump pump about 18 months ago. Basement has
been very dry since, with the exception of one crack in the wall that
leaks maybe one drop of water per hour during very heavy rains. The
sump pump definitely runs during rain storms and sometimes for a day or
two afterward (very intermittently).

Existing wall construction: Built in 1938. Concrete block with a few
sections of brick (I think for extra support in specific areas). House
is block with brick veneer. Some parts of the interior basement walls
have what looks like DryLok, but it could just be flat white paint.
Some areas were previously finished in the 60's with pine paneling and
have an off-white paint that does not feel like DryLok. These areas
have since been painted with latex paint for aesthetic reasons. The
entire perimeter has an 8" vinyl "baseboard" installed with the french
drain and designed both to let any wall moisture drip down into the
drain system, and to keep the backfilled hydraulic mortar from filling
up the holes they drilled in the base of each vertical channel in the
block walls.

For half of the year, the inside of the basement is the warm side.
When it's hot out, the sections of wall above grade switch to being
warm on the outside.

Even without insulation or registers, the basement is very comfortable
year round. The HVAC and ductwork is likely responsible, except on
days when no climate control is necessary and the earth is doing all
the work.

Whew...I think that's all. Now, some things I've been thinking:

The french drain contractor said that I could line the walls with
plastic and tuck it behind the vinyl "baseboard;" however, I'm hesitant
to create such a nice place for mold to thrive.

The basement is small, so I'd like to avoid dedicating 4+" to wall
construction. The previous pine paneling hung from furring strips that
I have since removed. I was thinking about using 2x3s or 2x4s turned
sideways on 2x2 pressure treated sole plates. The plates (regardless
of the size I choose) would be adhered to the floor with Liquid Nails
to avoid giving hydrostatic pressure a few dozen places to relieve
itself onto my floor. While some have said you should avoid letting
wood studs touch exterior walls, there seems to be more people advising
not to leave a gap.

I have read about gluing 2" closed cell foam with taped seams to the
wall to act as a vapor retarder and insulator. Supposedly, the foam
breathes enough to dry itself out, and is thus not a barrier. The tape
is to avoid heat transfer, not moisture movement. I have also read
about people gluing drywall directly to the foam and calling it a day.
This is a very attractive idea, if it works. I'll just use mollies for
my wall hangings. I've considered putting the 2" foam between the
aforementioned 2x3s or 2x4s, but this might be useless unless I seal it
to the studs really well. In either of these situations, I'd have to
cut channels in the foam for the electrical, and the boxes might
penetrate all the way to the block wall.

Finally, in addition to requesting your general opinions, I have a
question: If the agreed-upon solution is to use a vapor barrier or
retarder on the inside of the wall, is it ok to penetrate it with
electrical boxes, or should I force the box in place, pushing membrane
a couple inches into the wall.

Many thanks to anyone who takes the time to read this and offer a
possible solution!