Here's a little progress report with pics. I'm now past the worst part and have the fully prepared envelope for the theater. It's funny how many folks post a construction thread when they are nearing completion and I'm still digging out the hole in the ground!
A big hole needs a lot of concrete, poured in three phases: the footings, the walls, then the floor.
Here is the prep for the footing pour:

After the footings were poured and we completed the existing foundation excavation we have a lot of rain. It was actually quite timely because it allowed us to get the (unexpected) drainage problem worked out before it was masked by the new concrete floor:

The problem was the original cold joint at the footing to wall boundary that we had now exposed:


The really strange thing was that this was on the downhill side of the house -- it appears as if the water was flowing up hill. After a lot more digging we found that the water was indeed draining into a fill hole that was more porous that the surrounding clay soil so.... we fixed the drainage and puched through the footing on the opposite side of the crawl space and added a sump pump as a precaution:
