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Insulating/waterproofing Exterior Above Grade Foundation wall

So we have this insufferable below porch cold room that condensates like crazy. Part of our holistic approach to dealing with it both inside the house and outside is not necessarily to get crazy with digging down to footings, etc externally, as the rooms main issue is the ceiling and top portion of the walls. 

Part of our plan is to dig down 2 feet, waterproof seal what we can see and add an insulation skirt around that portion of the above grade foundation. 

Two questions.

1. does that sound reasonable?

Keep in mind this isn't our entire plan to solve this issue, just a why not add we thought might help. If we're going to try and workshop the ceiling, go ahead and add some insulation value with a few skirt panels we like the look of around the semi-finished basement. Its iowa so am i right in thinking it cant hurt?

2. Is waterproofing the above grade exposed foundation wall tops going to be an issue? Obviously in a world with no financial or convenience obstacles, I'd dig it all up, but it doesn't seem necessary. Part of it is also aesthetic. The exposed exterior of the above grade foundation wall (about 2.5 feet) is ugly as sin, and I'd rather just seal it up with a nice uniform coat, even if we would only be going 2 feet below grade as a cutoff. Or is there a more breathable pure paint solution?

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