The original basement: rubble, damaged, water issues at the slab, scrabble, rock and broken thin slab floor, insulation stuffed in window wells with cracked glazing in the frames, daylight visible between window/wall, cellar door/wall, joists/top of wall, and even peeking through between some of the rubble. Two monster oil-fired boilers and two uninsulated electric water heaters. Oh, and 6'5 clear height.
Happily, this rubble basement was very dry. No problems with water penetration through the walls once the daylight between the rubble was parged over, lovely dry joists high above the outside grade. The decision for more living space: Dig it out! If the basement had not been so lovely and dry, there's no way this would have been the right solution. Spray foam in wet basements gives you ten kinds of yuck.
Finished product: 2 bedroom + bath plus living space with 8 foot ceilings, R40 walls (closed cell foam against rubble, standoff 2x4 wall on gaskets, cavity filled with rockwool), R20 under the slab, radiant infloor supplied by solar thermal/propane.