My belief is that rubble-stone foundations are best left undisturbed, especially below grade. You have your wish list. My recommendation is that you have a certified civil and structural engineer examine both the soil and structural integrity of your home in consideration of your intentions. Much of what you wish to do, if it can be done, will likely need to be accomplished within a very short timeframe - you have to keep the existing foundation stabilized! Qualified contractor, not a DIY project. All I can encourage is get LOCAL EXPERT advise before you begin. I live in N. IL. Our son owns a home the approximate age of yours. Basements then were cellars and weeped in wet season. The advise I share is based on guideance from an architect who evaluated their home for an addition. Hope this rather negative reply is taken as a recommendation to be cautious, not a put down on your desired result. Good luck.

Nice room! My personal choice would be a bit different from yours. I'd do a mid-toned LVT throughout the entire area, and use a nice patterned area rug on top in the rec area, and a coordinating runner going up the stairs.

Check your gutter system and water drainage around house. I had slight water in basement in one particular area before I placed gutters. In one problem area because water came off of one roof area down to another roof area and was concentrated /drain off in one area. Once gutters placed didn't have a problem. My basement is water proofed similar to yours. My parents have had water (not a lot but enough to soak carpet on one side of basement) in extreme rain periods, twice in 15 or more years. They had carpet with thin pad. They put down a berger with out pad just in case it ever gets wet again. No pad to dry and a jute backed thinner carpet just in case it gets wet again. If you want pusher carpet in one area lay a area rug there. The berger carpet is sufficient for warmth. I would be afraid to raise floors so carpet doesn't get wet, then you may not know if there is a issue.

Thanks, Sharon. Our budget is pretty small -- we are basically building on a shoestring here -- and I think we have done the best with what we can afford (but we're certainly not pros at this!). However, it is a full walkout on the side with the door, and the elevation on the front and rear slope down, like the sides on the house you show. The elevation drawings I included aren't up to date with the most recent grading plan. It's a little less conventional but fits our desire for a south facing long side of the house as well as the current elevation of the site. The reason we were trying to avoid the beam is because our foundation guy told me that we can't have a beam sitting over the door for structural reasons. We are doing a pre-cast (Superior) wall for the foundation.