Well, This is one of those adventures best completed with the advise of a professional engineer. If you are fortunate enough to live in an area where the masons are "excellent" and sometimes where there are old homes built like yours they are around, you can take his advise pretty seriously. However, sometimes with sandstone, the moisture effects the integrity of the foundation to the point that some "special fixing" needs to be addressed, and that would be best accomplished with an engineer. I would caution you about one thing, however. Some engineers are not geared to solving your kind of problem and could overdesign the solution. Don't be afraid to ask who you are talking with if they are familiar with this kind of issue. For example, on a project I was working on recently, a solid masonry building with a sandstone foundation in a downtown area had a similar problem. In fact, the sandstone foundation was desolved in some areas that the wall had the possiblity of failure.The moisture had also wicked its way up the wall into the brick mortar as well, and had rotted of the ends of the floor joists. Not a pretty picture. This is probably a bit more of a situation that what you face, but I had to make sure I hired an engineer that was familiar with "our" area and methods of construction of this type of building.
You did not mention if your house was a frame structure or solid masonry. The advantage of frame is you can "jack" things around a little easier if you have had substantial settlement due to the age and deteriation of the foundation.
Good luck, and keep at it. Fine old homes are hard to find and usually worth the effort. beg