Different options for setting floor joists on top of cinder block foundation

Before going through the waterproofing hassle, do check your gutters again. Even though it's the gable end, you want to make sure your downspouts elsewhere are carrying the water away from the foundation as far as they can.

Then, check the slope of the ground. Is it sufficiently sloping AWAY from the foundation? If not, fix that too.

After that, if you still have issues, if you're going to be digging out the foundation, you definitely want to consider a drain tile system while you're down there. That typically has to go near the footer, so be careful doing that (you'll likely want to consult an expert before digging out the footer.)

At that point, the typical waterproofing system is some form of a rubber membrane then covered with dimple-board. The dimple board protects the membrane from the backfill and also acts as a drainage plane into the drain tile system.

Unless the existing window is leaking, the sole criterion for judging better and worse options in this case is the likelihood of future bulk water infiltration.

The current installation is performing functionally and aesthetically as part of the building envelope. Breaching and patching the envelope is not a repair, and at best will only perform equally well with the current situation in regard to the prevention of bulk water infiltration.

From an insulation standpoint, the cost benefit analysis should factor thermal performance based on the weight of an empirically proven installation versus untested new construction and the requirement that the new construction must occur under less than ideal conditions (i.e. under a porch).

The existing window wasn't a problem a year ago. It isn't a problem now. It is unlikely to be a problem a year from now.