I have a simmilar problem to yours, that the water damage has both caused subsidance, and also damage to the mortar between the stones.
I would suggest that cleaning out the mortar, and repointing with lime putty and sand in 1:3 mix into the stone joins first would help stabilise the wall for want of a better term, then any further fixing under the wall/ closing of the gaps etc could be done.
If you have any large movement cracks, dont fill these up, only where the mortar has eroded. If you fill the cracks from movement, and you want to lift the wall in the future, your wall has nowhere to go.
Begin at the bottom of the wall, and work your way up.
Pre wet the stone often for a few days before repointing, and if the cracks are very deep, only point to 25mm deep at a time to allow the mortar to set and shrink, then add further mortar untill your at the surface and finish as required for your house.
Use lime putty, as you dont have any dpc, so the lime putty mix allows the walls to breathe and moisture to escape, and its softer than your stone, so it wont damage your stone unlike portland cement that will not allow moisture to move thru the wall, and as the house moves, the cement wont, and the weak point is your lovely limestone blocks which will be damaged.
Im sick and tired already of removing portland cement from my old stonework to see the damage its done.
Ive already gone thru bags of lime putty now and the place is starting to look good.
Good prep, wet it out, and let it dry slowly, and it will look great.
Ps, have a close look at the old mortar, and with a sample try and match up your sand.
Looks like our place sourced its sand from the local creek, so ive used a mix of concrete sand and RF plaster sand.
Last edited by Trains; 22nd Mar 2011 at 02:18 PM.
Reason: Clarification on deep crack repointing
It cant be that hard can it, someone else has done it before.