I HAVE GOT A PROBLEM!
#1

I have a 1 car garage made of cement blocks, their is a 2x4 stud wall with plywood sheathing toward the blocks inside that is water damaged along the bottom and some places 6 foot up all the way to the floor. I did some detective work and I found cracks 1/8" to 1/4" in the walls running from top to bottom in 3 places and gap (were blocks meet the slab) 1/8" I think all the way around at the bottom of the wall. What can I use to waterproof (long term if not permanantly) these cracks & gaps? How can I safely replace the 2x4's and plywood (the roof is flat and made sheetmetal) without the block wall falling?
#2
Is the roof supported by the block wall, or by the 2X4 wall? If it is supported by the 2X4 wall, does it overhang the block wall? Answer those questions, and one of us will tell you how to replace the 2X4 wall without the roof falling down. As far as sealing the block wall, have you though about putting vinyl siding over it? Start the siding about 3/4" below the blocks, and it won't leak into the garage.