Nilesw,
I bought a Whirlpool floor model on wheels at Lowes for around $300-$400 last year. It fills up about a 2 to 2-1/2 gal reservoir or you can use a piece of garden hose to a floor drain, which I do in the basement.
This is a serious dehumidifier. Don't bother tinkering with the small ones. Mold is serious.
Dry it out, wipe the walls with diluted white vinegar solution (like Spring cleaning), and keep it dry. Vinegar has similar properties as chlorine bleach, but without the chlorine gas risk. Just DO NOT use bleach and vinegar together (makes lethal chlorine gas /forums/images/graemlins/frown.gif /forums/images/graemlins/shocked.gif )
Sealing the inside of block (?) walls only lets the wall fill up with water and deteriorates the wall. To do it "right" from the inside only, have to cut a trench around base of inside of wall with small pipe, put a small hole in the bottom of each block, put a small piece of hose from the hole to the pipe in the trench, then run the pipe into a collection hole drilled into your floor with a sump pump to pump the water up and out a drainage pipe.
Then, you can seal the inside wall. Will still deteriorate the wall, but at a much slower rate.
Another thing to think about- insulation. Many homes had unheated basements, so faced insulation (has a moisture barier) was used. Once you add heat to basement or use it as living space, any moisture is trapped.
I had a similar issue with moisture, but not wet walls, and removing the overhead insulation helped a lot. I am planning to insulate the walls with the Dow rigid foad insulation and finish the basement this winter for a rec room with pull out sofa and downstair bathroom and shower to double as a guest room.
I have already planned most of the items and considered many options (like how to add sewage facilities in a basement), so if you want some ideas, just ask /forums/images/graemlins/cool.gif
I also hear an open bowl of vinegar set in the room will help eliminate odors (musty smell?), but haven't tried it.
Good luck.
-JC