Honestly, leave the insulation off inside the house. Put R20+ of foam on the outside and re-side it. It will do wonders for the dew point(and really improve cooling too). If you do it the other way, you can get sweating on the block walls and be back where you were with the mold. R20 of sealed foam is way better than "advertised R20" of fiberglass which in reality is only maybe R12 in your conditions. Then find a way to wrap the foam to the top of the blocks so that it can meet the attic insulation and use a good vapour barrier.
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