Assuming the XPS is 1" thick, the perm rating is about 1 (ratings vary by brand). That makes it by definition semipermeable. But in any case, it's a vapour retarder, not a vapour barrier. So eventually the blocks will dry and not support mould growth. Where you see mould on blocks is when the moisture is never stopped.

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Delta membrane keeps water off the foundation wall; and any
water that passes the barrier quickly flows to the footing drains.
Photo: DeCicco Homes

It's unfortunate that a plastic dimple membrane wasn't installed on the exterior foundation wall when the footing drains were put in.

The perm rating on even 3" of Owens-Corning Formular is .6, still semi-permeable.

The plastic membranes have been around for more than 20 years in North America. As far as I'm concerned, any company that does exterior waterproofing without using a membrane (and cove sealant at the joint of the wall and footing) shouldn't be calling themselves a waterproofing company. In fact, the membrane was mandatory for several years under the Code I build under. Some custom builders here even apply a spray elastomeric or peel and stick membrane and the plastic membrane. The big cost and aggravation, as you probably know, is digging down along the foundation.

Excuse me if I'm obvious. But until you solve the water penetration problem, hold off applying any moisture sensitive materials to the interior framing.

The perm rating on even 3" of Owens-Corning Formular is .6, still semi-permeable.

The plastic membranes have been around for more than 20 years in North America. As far as I'm concerned, any company that does exterior waterproofing without using a membrane (and cove sealant at the joint of the wall and footing) shouldn't be calling themselves a waterproofing company. In fact, the membrane was mandatory for several years under the Code I build under. Some custom builders here even apply a spray elastomeric or peel and stick membrane and the plastic membrane. The big cost and aggravation, as you probably know, is digging down along the foundation.

Excuse me if I'm obvious. But until you solve the water penetration problem, hold off applying any moisture sensitive materials to the interior framing.

Considering the basement is already finished, we don't have the option to "hold off applying any moisture sensitive materials". Unfortunately, it's already done. I was just wondering if we solve the exterior problems by setting up burms, trenches and drains to the street, and we're able to keep any more moisture from coming through the block, can we leave the finished basement as is? Or should we be ripping everything out, down to the block to dry it out and start over (hopefully, not what we need to do)? We are hoping that the block will be able to dry behind the Insulpink without creating a mold problem and we can just do the exterior work and be done. Any other thoughts?

the basement is already finished

That could change the story. If you haven't already done so, ASAP use lots of heat and dehumidification--even rent industrial dehumidifiers--to draw out the moisture. Mould does love drywall, wood and hidden areas. When that's done, you might want to test suspicious sections for dangerous mould. (See link.)

A couple of builds ago, a neighbour's wall started leaking. My fault, he figured, as I had removed a row of his hedge that was on my property. So he "designed" a system of weeping tiles to pick up surface moisture. The installer (my grader) agreed with me it wouldn't work. But, heck, money is money! A couple of months later, in bitter winter, a crew excavated eight feet down by hand along the foundation, found the settlement crack and patched it. No more water.

Maybe your system will work better.

Here is a link that might be useful: Inspectapedia on mould