Thanks for your reply - it's not really what I wanted to hear! Unfortunately, we're not sure when it was painted, and we're thinking it might contain lead - going by the age of the house. The paint is not actually peeling off - it looks like the concrete is pushing it out, taking concrete and sand with it. This section is about 10 feet in length, and I'm afraid that if I don't remove the paint the foundation will continue to deteriorate. (We would remove it mechanically using a wire brush or some similar device if we weren't concerned about the possibilty of lead).