I had a house with similar issues in the basement. I did a lot of homework and cleaned off the wall, but I ended up selling the house to a developer who wanted to build a shopping center before I put anything over the wall.
I agree about removing all the plaster. I ended up knocking most of my plaster loose with just a broom, then a wire brush for some stubborn bits, then a hammer for the last few bits.
I have been told that it’s a flat out impossibility to “seal” the walls against moisture seeping in. Sealants help, but you can’t really stop it – the key is to keep the water away from the basement walls to begin with.
- Wait for a big rain storm and then go around outside, looking at how the water flows.
- Figure out how to keep the water flowing away from the walls instead of seeping into the ground at the walls.
- Fill in any low spots so the rain doesn’t have a tendency to puddle next to the wall.
- Make sure your downspouts are getting the water away from the soil around the basement.
- Make sure your downspouts aren’t broken underground and leaking water into the soil near the basement.
For the most part this sort of stuff should do the job. In some rare cases the house may be situated so it’s just impossible, i.e. there’s nowhere for the water to flow away to, or it would have to flow uphill. French drains around the foundation walls are one possibility, basically a performated PVC buried in a trench full of gravel, close by the foundation wall. Any water that seeps against the foundation goes into the gravel, into the PVC and drains out to wherever you send it.
I know one guy who had to put french drains inside his basement, i.e. in his basement floor around the edge of the basement, wiht a sump pump to pump it out. I’m still not sure how this helps protect the walls, maybe it simply keeps his basement from filling up with water.
If you plaster (I have no idea if that’s a good idea or not…) contractors I’ve talked to tell me that the big deal with plastering is making sure you do multiple, thin coats and wait at least a day between coats to allow the plaster to dry. Drywall mud dries fast but shrinks a lot. Plaster dries slowly and doesn’t shrink as much.
Of course the real difference between a pro and a DIYer is that their plaster looks as smooth after they trowel it on as mine does after I sand it :-).
-- "Always cut *towards* a major artery... that way you'll be careful."