By your description your walls are in the process of gradual erosion, commonly known as dusting. The previous repairs were probably done to repair the same problem. The cause was in the original pouring of the foundation and over the years it has gradually worsened. You should NOT cover up this problem since it could result in serious structural problems. I would consult a few masonary contractors, or structural engineer, to give you their opinion. Never rely on one opinion. If this is indeed dusting, there are a number of ways that the repairs can be accomplished depending on the severity of the problem. 1. Acid etching with a bituminous coating. 2. Coating with an epoxy or polymer. 3. Thin bonded resurfacing with a latex modified concrete. 4. Grinding or jacketing. 5. Total replacement in severe cases.
I know this was not the answer that you were looking for, but, having the walls professionally evaluated is the only correct answer in this case. GOOD LUCK!!!!