Looking to redo a couple semi finished rooms in my basement. One of the rooms is already finished with 1x3 furringstrips and paneling. I plan on removing the paneling but what about the furring strips? They are attached to masonary walls with nails. If I start ripping them out won't that do a lot of damage to my mortar joints? Should I just take out the paneling and frame over the 1x3's?

Is this a pour concrete basement of cement block?

It's cement block.

I would start by checking the studs for plumb with a level and see if most are plumb.

Next run a sting line through the center of the wall the see if they line up pretty good.

If they do you can use them. If they do not line up, you can sister new 2x4 studs along the 2x3's and line them good each way.

Once you have a wall that is good up and down and side to side, you can proceed with insulation, electric and drywall.

good luck Roger

OK ablock wall, you can just assume it is out of level and plumb, they always are. The nails should not be in the mortar line but I would just leave them in place an abandon them. A proper wall is a stud wall laid out on the floor with a pressure treated floor plate. Once the wall is built it is raise upright and shimmed plumb, level matter less on a basement wall.