It would cost me about a Million Dollars to fire her; so, in an effort to keep peace I smiled and said "I can fix that".I have tried skim coating and am finding that any moisture from mud or primer causes blisters under the paper.

There will be the time and a deal and everything will work out.Let's be patient and more gentle with opinions?

Look for any cracks, moisture or decay in the foundation, especially if it's brick or stone.

We had a radiator heat pipe fail and it took the tenants months to notice the moisture accumulation.  

If I may add, Never by no means ever waterproof or try and correct the issue with interior drainage systems, think about it your still allowing moisture in the basement, if anything now your increasing moisture from entering into the dwelling because now you just exposed below the foundation floor, its a cheap way of putting a i guess you can say band aid on a more serious issue.

Gently rock or jiggle the WH to get it drain centered and suitably aligned.

We picked up gently uses but nice furniture, generic art to hang, kitchenware, and pretty much anything a home would need to live in.

Particle board if expose to moisture will bulge in few years.

And even though this house isn't quire ready to sell, I'm on the lookout for another gentle fixer to roll into. 

My grading contractor will gently dig up the tank, and one of my workers wants to keep the tank to turn it into a smoker/grill.