Painting Concrete Wall in Basement | Water Damage

We have a concrete wall in the basement - the style you'd see in the older schools. It is painted with relatively new paint from a previous owner.
A hole had to be drilled in the house a few months back and wasn't properly sealed. Quite a bit of water flowed through that hole into the hose down the outer side of the concrete wall (to where we really don't have access). Underneath the wall the carpet became wet for about three feet out.
Now paint if bubbling and crusting and peeling in patches on that section of the concrete wall especially in the grout/mortar areas. I scraped all the bad paint off and the concrete looks wet/damp. The grout/mortar from underneath the bad paint also seems to be very weak and can be relatively easily chipped with a metal blade. This is happening in relatively isolated patches so I don't think integrity is an issue.
We are painting the rest of the basement and are going to repaint the concrete wall as well. Now that we scraped off the bad paint should we let the concrete/grout/mortar air out a bit or is that moisture going to be in there for a long while? We bought some Drylok to seal it but we don't know if its better to just go ahead and seal it or to wait for it to dry out more. We also have no idea just how much water is sitting behind that wall and we really don't have the means to look.
Any ideas?
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