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In my last house a daylight basement the original sheetrock was glued to the cement walls with liquid nails that worked very well. I did pull it all out and add furring for electrical spaces. (I don't like exposed conduit and surface boxes in a room that became my man land). If you are worried about cracking at the sill add a accent trim over the gap.


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One possible solution (there are no doubt others, and I'll be interested to see what they are) is to set a strip (4 to 12" wide) of 1/2" cement-based tile-backer board at the bottom edge of the drywall.



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