Usually, the insulation goes inside the block. Inside the foundation, foamboard is fine. I'm afraid that any voids between the siding and the block would be prime real estate for termites to travel up into the house.
Termites are a major concern in the Southern states, you may not have as much problem there, but mold grows everywhere.
If I were you LJ, I'd insulate behind the block walls and use a masonry veneer.
Have you ever seen the brick looking tiles? I remember one brand. Z-Brick. It looks better than you might think. It attaches directly to the blocks with a mortar type mix. No moisture barrier on the outside of the blocks above ground level. Below the ground level, a moisture barrier is fine, I prefer to have the above ground blocks open to dry in the open air.
Sorry about the crickets there LJ,