I am seeking advice regarding a corner construction that I am not entirely sure how to fix properly. It is an outer corner, where the basement wall in a hillside house transitions to a framed exterior wall.

I drained it last summer and insulated below ground with Isodrän. Now, the aim is to insulate the wall above ground (probably with foam plastic which will then be plastered), but I am unsure how to deal with the outer corner in a good (and proper) way. As it stands now (and has been since the house was built in the '70s), the panel boards at the corner have been partially below ground and decayed... I made a temporary solution by removing the affected parts and applying a piece of Platon as an emergency fix over fall/winter (see images).

The insulation will extend out 100mm, and besides that, I will encase the inspection pipes in a small openable framed box. But how far out towards the corner should I place the foam plastic? I'm considering removing the white panel entirely and letting the foam plastic rest directly against the adjoining exterior wall, but I'm unsure how to easily transition back to the wood panel again.

It's hard to convey in text how I'm thinking, but I'm attaching a couple of images to show the current state with the temporary fix, and if anyone immediately sees a solution, it would be greatly appreciated to share!

Outdoor corner of a red wooden house with a black base and air conditioning, surrounded by gravel and greenery on a sunny day. Orange inspection pipes and a black drainpipe at the corner of a red and white house exterior with gravel and temporary waterproofing. Corner construction with damaged white panels, temporary black drainage mat, and orange pipes, showing a part of renovation in progress on a house exterior. Corner of a building with temporary fix; black and orange pipes, white wall with exposed area, surrounded by gravel, showing drainage and insulation setup.
 
Anyone have advice on how to best create a solution for this? I can't find any construction examples anywhere when I search around...

I’m attaching a small sketch made in Paint that very simply shows the current setup, viewed from above (gray = slab, black = outer wall, brown = standing studs and sill). In addition, the panel boards are placed around the outer corner.

Simple paint sketch showing a corner construction from above with gray slab, black outer wall, brown vertical studs, and sill.

I'm considering whether I can put up 100mm Styrofoam on the entire wall that is above ground and let the boards overlap the adjoining wooden wall, then create a new outer corner on top of these boards, or should I only go out as far with the Styrofoam as the foundation wall is built? Advantages/disadvantages, if there are any?

How do you create a similar solution in modern times? There still have to be some slope houses built, but, as mentioned, I haven't found any concrete construction example of the above, so any knowledge would be greatly appreciated!
 
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