kimcoco,

You have to fix the first problem - soil and drainage. Have you investigated putting in a retaining wall on the back side of the garage? Placing plastic sheeting and then filling the dirt back in won't cure the problem.

My suggestion is to build a retaining wall about two feet out from the garage. The height will be determined by the slope you have. After that, install curtain drains covered with pea gravel. The water will filter down through the gravel and the curtain drains will take the water around the garage.

After fixing the soil and drainage, replace the rotting wood with pressure treated lumber. You will probably have to sister wall studs that are rotted out with the wood that's still good. I'm not an engineer and with no visual to go on, I would assume you are going to need to support the rear wall while replacing the rotted wood.

Under no circumstances use bondo or wood filler on rotted wood. Cut all the rotted wood out.

If all else fails, consult a contractor.

Based on how you've described the location, I don't think you're going to have a way to stop the water flow. This probably isn't what you want to hear, but I'd start saving $$ so that I could plan a new garage in a different location in your yard.

We had the same rotting 2x4s, rotting from the bottom up, in our old garage which resulted from the base of our garage being lower than all surrounding area (partly due to settling that occurred long ago). We woke up one morning this past March and there was 4" of standing water in the garage - melting snow, slushy rain and horrible drainage. We are now the proud owners of a new garage which was raised 1 foot and we're now higher than what's around us.

With that other garage by yours, I think your hands are tied.

My dad fixed a similar garage problem once, here's roughly what he did.

1) Dig out the dirt from behind the garage.
2) Use heavy lumber and masonary blocks to establish temporary support for the upper part of the wall so you can.....
3) Demolish the entire lower portion of the wall.
4) Set up forms to pour a concrete wall in place of the rotten wooden lower wall. You could instead build it up using concrete masonary units ["cinderblock"].
5] Lower the upper wall onto the new masonary lower wall and remove temporary supports.
6) Replace soil at the back, addressing the drainage problem [perhaps curtain drains as described above] in the process.

Kec01, we're on less than 1/4 acre lot, so moving the garage isn't feasible. We have no where to go with it.

Airgual guy, that was also something that I thought of - adding cinder block / concrete wall along the bottom portion. Sounds like a lot of work, but I also think it's the most practical, though I don't know if it's something we could (or would want to) do ourselves. I'm assuming Rhibar (Sp?) is added with the cinder blocks for support.

I wouldn't even know who to call about this. What contractor would specialize in fixing something like this?

A GC will handle it just fine.
It is not as hard as it really sounds.
A temporary wall is built inside the garage a few feet from teh wall to be rebuilt.
Depending on the existing framing it can be pretty simple, or require some creative shoring.
If it is a gable wall in a one story garage it may not even be worth saving.

Here's an article on replacing a rotted sill plate in a garage, which shows how they supported and lifted the structure during the work. It's not your particular issue but similar enough to give you some insight.

http://www.hammerzone.com/archives/framecarp/repair/sill/garage/rotted.htm

Rebuilding the wall so that the bottom section is masonry seems like the obvious and correct fix; nothing else is going to be a long-term solution. No membrane is going to save an untreated wood wall below grade for long. 2-3 feet of soil against a wood wall is crazy.

Thanks everyone for the feedback - very helpful.

Talk about a money pit! The ONLY thing we haven't replaced or fixed on this house yet (besides the garage wall) is the water heater, and that's gradually dying. Within the past two weeks, we've noticed the hot water heater is leaking, our 3 yr old piece of crap GE profile side x side refrigerator is leaking and temperature controls range from zero to 22 degrees on the freezer, and 37 to 44 degrees on the fridge, AND my basement sewer drain has backed up the last two times I've used the dishwasher.

Does it ever end???????

It never ends...sometimes though you'll get a little time between repair problems. Seems like everything's happening to you all at once though. What did you decide to do about the garage? Do you think you'll try snaking the basement drain yourself? It's a heavy job but it can be done by a homeowner for a lot less than having a plumber do it.

I have the same problem that is shown in the link that bill g web refered to. I have fixed the water issue by digging down below the foundation, and putting in a drain, covered by stone. The instructions on that link have you jacking the garage up a few inches, replacing the sills, and then lowering it. The problem is that the exterior is brick, and it seems that jacking up the garage will only cause problems with the brick. Any suggestions?