My new (to me) house has a 60-year-old block foundation. The previous owners did little to no insulating in the basement. However, they started to finish a bedroom down there, and got as far as framing the walls and wiring in the outlets and lights. I'm interested in finishing the job.
The framing was done using pressure-treated 2x4s for the sill plates and the studs that border the foundation, and ordinary 2x4s everywhere else. The distance between the studs and the foundation walls varies, but is never more than an inch, and in some places it is barely 1/8 of an inch.
My research tells me that the "right" way to do this would have been to cover the foundation walls with sheets of rigid-foam insulation first, then build the walls in front. Given that it's too late for that, what's the second-best option? Spray foam (expensive!)? Cut rigid foam to fit the spaces between the studs and caulk the seams (time consuming!)? Paint Drylok between and behind the studs, then fill with fiberglass batts? Just use fiberglass and hope for the best (I've been told fiberglass will eventually grow mold if you install it in the humid space adjacent to a foundation wall)?
I live in an area where it stays below freezing for most of the winter. The soil around the house is sandy and well-drained.