Parge coat/block deterioration

[Badfish740]

I have a 1960s era ranch, parge coated foundation with the old style cinder blocks. Recently I cleared away some vegetation from the side of the house and found that the downspout had fallen off and was dumping rainwater right next to the foundation. I never noticed a problem inside (we have full perimeter drains and sump pumps), but the water has caused deterioration of not only the parge coat, but also the block itself:

Should I just mix up some stiff mortar and rebuild that corner, or is there more to it than that? There's no cracking that I noticed on the inside corner. Obviously I'll make sure that the water is well drained away from there in the future.

 

[semipro]

My first thought would be to remove any loose masonry, apply a bonding agent, then repair with a high strength, fiber reinforced mortar. I'd probably add some bonding agent to the new mortar too.
You'd need to make sure to seal things well so that no water can make its way into the interface between old and new masonry.

 

[Lumber-Jack]

The main thing is to get that water away from the house.

 

[xman23]

That was caused by water getting in the block. Chop or cut it out all the soft blocks and replace.