Sounds like a big job, and will be messy. Excavation, concrete cutting, and you'll have to remove part of your finished wall for the new window. Then tidy it all back up again.
I don't know what other issues you may find. I would consult a pro on this one.

technically you should be able to put in the egress window no problem (sounds like your handy)....as for the permits it depends on your location and your townships/city records keeping....if the house has changed hands alot I know some people have gotten away with stating the basement was finished when they bought it....if the window permit is no problem to get then get it....its a small piece of mind and like you said you will be highly visible to neighbors and prying eyes....as for the basement the inspector will be checking the window and won't give a hoot about the basement unless he's a real stickler (ask around and see how your local building officials are)....worst case which most likely wont happen is they'll make you rip the drywall down so they can do framing and electrical inspections....but that's a long shot....I say pull the window permit and although I would have got a basement permit...its too late for that now....so if you are worried there are ways, which I do not condone, to deal with the building inspectors to make it less painful (reveal what you did and pay for permits post work, lie and state it was finished by previous owners, rip the drywall down apply for a permit and then call for framing/electrical inspection, etc)

hope this helps...unfortunately once you do a job without a permit there is little you can do to correct the problem that won't require alot of work or "creative" solutions

Is your subdivision still under construction? How would thte city find out if you didn't tell them (digging or not). Do they drive by a lot?

dominogold - "How would thte city find out if you didn't tell them (digging or not). Do they drive by a lot?"

The trees have eyes!!!! there are many bitter neighbors in this country that will stick their nose in your business and report you....for the life of me I'll never understand since any improvement in your house ultimately raises the value of theirs too but whatever....I've seen it happen countless times...guy working on his house and magically the building inspector shows up and asks what your doing....and he wasn't just driving thru....he was called....I know cause I' friends with one and he gets it all the time....he hates going out on calls like that!

so improvement minded owners beware...get a feel for your neighbors if you are thinking of skirting permits!!!

"...so improvement minded owners beware...get a feel for your neighbors if you are thinking of skirting permits!!!"

Better yet, research your risks BEFORE you decide to finish without permits...as you could void your insurance in the event of a fire...risk fines and back taxes...and risk having to do a tear out.

In addition, you might want to verify exactly WHAT your town requires in terms of egress...as not all code is created equal.

An ounce of prevention...

did you ever find out if you could do a post permit?

I installed an eagress window and cellar entrance without a permit. I learned it only matters when you buy or sell a home. The last house I purchase had a cellar entrance in it when I purchased it. However, when I sold the house it turned out the prior owner didn't get the permit and I had to at the time of selling. IN my area it depends on the town,bank, title company and buyer. At my current home the house didn't have a permit for a large deck that wrapped around the pool and attached to the house. The deck is about fifteen years old. The seller had to fill out an application and pay the permit fee. They mad some minor changes to the deck and the permit was granted.