Our basement wall has a two foot concrete wall from the floor up then gyproc walls.
We noticed on the wall that has our outside concrete steps on, that there was dirt coming in where the gyproc meets this 2' concrete wall. We did an inspection cutting away some of the gyproc and found a rotting stud and wood that had been eaten. It's quite damp in this area but seems to be fairly localized. This wall facing the concrete steps outside were covered over with wood siding against the concrete and no visible moisture barrier was used. We've taken all the rotting wood out, but now we are not sure what we should do to seal this.
Should we tear the entire wall out and start over, or just replace the rotten stud(only about 5" was rotten) The entire wall isn't damp but no sealler appears to have been used between the concrete outdoor steps and the interior wood?
Please any advice? HELP!

Rot does often happen between concrete steps and the framing behind them. I would cut out the wall board the width of the steps plus a bit on each side, to the middle of the next studs on either side, and report back how much damage you see to the wood all across. It's easy to replace the gyp, and there's more to know about the construction before you go knocking out studs.