Thanks in advance for all of your help and information. I have read all the threads that I could find regarding this issue. Basically I have a stone foundation and the outside and part of the inside is starting to chip away. The is coated with some type of Duraseal product (white sealant paint), it was like that when we moved in. The outside is coated with a tar like sealant that is flaking off. Behind it i've found many bugs and bug holes and loose mortar holding the stones together. I've included some pictures so you can see what I am dealing with. I am working on getting a simple drainage system around the foundation on the outside of the house.
I plan on taking a wire brush and scraping the outside as much as I need to first and then filling it back in with Masonary Quickcrete, which i was told worked great.
A couple of questions regarding this project
1. I purchased some of the new type sealant for the outside. It can be brushed or sprayed on. It's called Gray Shield and is a rubberized sealant. Should I use it? I've been told "Yes seal the outside." by some and "No you have to let it breath." by others?
2. Also what should be done around the foundation that has sidewalk right up to the house? I can put a drainage system around where the garden/lawn is with some piping and pea pebbles however I don't think this would look right where the driveway butts up to the foundation.