Old dirt basement with parged walls

While I like a challenge this one needs some ideas. Bought an old (1912) bungalow 2.5 yrs ago which has a cement floor basement (amateur job but concrete nevertheless), one 5' wall of concrete block and the rest of the walls are dirt with parging that is crumbling and now one wall is leaking. I have been renting the house since buying it and had decided to sell it but have lost 2 deals due to water leaking in the basement (understandable). This basement is really rather gross looking as someone painted it all pink!!:hide: Believe it or not the house seems solid and I have no problem renting it out. Am moving to another province so would like to sell it. My plan is to replace the eavestroughs as they are older plastic and are leaking down the house especially where the basement leak is and running them further away from the house. We also have a problem with leaves because there are many mature trees around the house and is a constant problem plugging the eaves. I would also like to put up pressure treated walls which would not stop leaking but would be much prettier & cleaner, can this be done over the dirt/parging and would I need a vapour barrier on the back side against the dirt? Seems to me this would cause sweating against the wood. Any ideas other than digging the dirt out and putting in new cement walls? What about using cement blocks which would be hard to do. I may have to do more positive landscaping however it does not seem to be sloping to the house.

If they parged the dirt, you have a big problem. Dig around a little and see if it isn't rock piled up to make a wall. You wouldn't want to build treated lumber walls for this. It won't help sell your house. You would need footing under concrete block wall.
Depending on where you are and the standards there. Footing here are something like 8inches high and 20 inches across with rebar insides at least as deep as the yearly frost depth. This is a huge job. Get some quotes and discount the price to the right buyer.