Basement – Floor-to-ceiling bookshelf before or after carpet

You can make the floor water resistant by varnishing it. Two or three coats should protect it from most damage, especially if you lift the affected tiles straight away. Most damage is done by the prolonged contact of the water with the floor. Are you expecting a lot of spillage?

This does mean that you might want to consider not sticking the tiles down or only using a very light adhesive. If the tiles are well fitted and cover all of the floor area there shouldn't be any lateral movement in the tiles themselves.

The concerns I'd have -- outside of whether there's anything under the floor that could be disturbed, and whether there's a rock layer under the floor that would prevent your lowering it -- would be:

1. You're going to have to make sure this doesn't disturb the foundation. I'd suggest getting an engineer's advice before doing anything.

2. You're going to have to dispose of all that rubble. That means renting a dumpster, and hauling it out of the basement. Not impossible -- a friend of a friend put a basement under an old farmhouse by digging outward from the root cellar, putting the house up on jacks as he went, and then getting a foundation installed under the house, and he did almost all of the digging and hauling himself -- but it's a nontrivial amount of work. You're going to be moving several tons at least.

3. Putting in the new floor is going to require establishing a good seal against water infiltration between it and the foundation walls. Again, I'd suggest getting an engineer's advice.

So: Yes, theoretically it can be done. Personally, given the cost and effort and potential liability involved I wouldn't consider doing it on property I didn't own. And I definitely wouldn't consider it without expert advice.