Concrete Spalling

neight

I dug down to prep my concrete block foundation for some waterproofing/sealing, but i think it may be a little late. we have had this house for 3 years now and have been putting off sealing the exterior (above grade) as it seemed the foundation below grade had been sealed, i.e. brush marks on the walls at grade. well, as i said i dug down and found, at least this section of the bulkhead and house, has not been sealed at all...and some pretty severe (in my opinion) spalling has occurred. the example in the picture is the worst. it's a small section that i can see, as i've only gotten about 16" down. i'll be able to provide better pics tomorrow, but i'd like to jump start any ideas of what i can do here. thanks for any advice!

-nate-

the scrap 2x4 is only a reference point