Vertical cracks on newly poured foundation

The first step is to look at the foundation that supports that the walls of the garage. If the walls have foundations separate from the garage floor slab and those foundations are similar in construction and depth to those of the main house then this is a good indicator that you are in a good position to proceed with the remodel plans.

On the other hand if the slab was poured with integral footings around its periphery that are similar in size and depth to those of the house then you are also probably good to go forward.

If the garage is simply a thin floating slab then a whole lot will depend upon the climate in your area, the type of soil, the lay of the land and local code requirements. You may be in a good position if the "attached" structure of the garage to the house is sound, the slab shows no signs of cracking and shifting and the construction technique is up to code.

In any case it may be well to check with the local permitting authorities and/or bring in a consulting local contractor to give you ideas and make suggestions.

One last thing that comes to my mind regarding this potential project is the evaluation of whether the garage slab is below the floor level of the original house or not. If it is below you may very well want to consider the possibility to build up the floor to the level of the house. This will help to make the added living space feel like proper part of the house and make movement into and out of the space a whole lot more natural.

OK, the water must be coming from somewhere:

1. Water from a leak. If you've been checking your meter and don't think you have any leaks inside that's good, but it's possible there is a crack or break in service line upstream of your meter. This might actually explain reduced water pressure in the house. If you suspect this is the problem I would call your water company and have them take a look.

2. Rainwater. If the water appears only during and shortly after a storm, then you probably have a drainage problem. Make sure all gutters are directed away from the house. You might also look at grading near the house to make sure water will flow away from the house. Is the porch at the bottom of a slope towards the house?

3. Groundwater. I would be a little surprised if this were groundwater welling up, but it's not impossible. Have you had a very wet spring that would've raised the water table level? Or done any serious landscaping / excavation / compacting in your area?

4. Septic system. An unhappy septic system can cause water to well up, although probably not so close to the house or clear / odorless. Do you have a septic system?

(I wouldn't beat yourself up too much about not sealing that gap. If water is pooling from below I doubt a little sealant would hold it off for long.)