Reading past threads, experts indicate that a crack/hole etc.. in an old house foud. wall should be dug out to the bottom of the wall, cleaned tarred, covered with some water proof material, tarred again and back-filled with pea-stone gravel. My questions are:
* why back fill with pea-stone gravel? Won't this draw water from the soil around it and just make more water sit against the wall? Why not use the soil you dug out to back fill?
* How big of a section is ok to expose on an old foundation? Would 5 or 6 ft of a 20-30ft wall be an issue? The consensus here seems to be not to try to waterproof the entire outer wall of an old foundation since it will disturb the fill/wall connection and could cause more problems.

Well, you have the process a little bit wrong. You dig about 18 inches out from the wall, in the areas where a hose test has indicated that a crack or opening exists. Remember, it is very possible for a wall to crack on the outside without the crack being visible inside. If it's a crack, you dig at least to the bottom of the crack and preferably to the footing. You clean and repair the crack using hydraulic cement. Then you apply a thick coating of dampproofing compound to the wall, and in it, you embed the 6-kil polyethylene film membrane.

You backfill with gravel to relieve hydrostatic pressure on the wall. If you put the soil back that you dug out, you will possibly be putting back exactly what caused the crack! Yes, the water will still be there, but it is the combination of water and soil that creates hydrostatic pressure, The gravel allows that pressure to dissipate before it gets to the wall.

"You dig about 18 inches out from the wall, in the areas where a hose test has indicated that a crack or opening exists"

Rich - the 18 inch thing confuses me. Do you mean you should dig a ditch but leave 18" of dirt between the wall and the ditch...then only take out the 18" of dirt between the ditch and the wall in the area of the crack/hole you want to fix?

" You backfill with gravel to relieve hydrostatic pressure on the wall. If you put the soil back that you dug out, you will possibly be putting back exactly what caused the crack! Yes, the water will still be there, but it is the combination of water and soil that creates hydrostatic pressure, The gravel allows that pressure to dissipate before it gets to the wall."

Rich - Won't the gravel pull the water out of the surrounding soil and possibly create a situation where there is standing water right up against the wall? I have no drain tile at the footers so I would be concerned that the water would not move.
Thanks for your time...Sorry if I am being thick.....

You dig starting at the wall and going out 18 inches approximately. Do NOT pile the excavated soil along the edge of the excavation...wheelbarrow it away. That 18 inches should give you enough room to work. If your footings are very deep, I suggest having professionals do the digging because of the danger of cave-ins.

The water will be up against the wall whether there is gravel or not. What you are avoiding is water combined with soil, which produces hydrostatic pressure. Water in gravel will not.