Try placing a screwdriver tip on the lock shield with the screwdriver handle on your ear. You'll hear the water come through.At that point, do little else except enjoy the warmth.
Knauf xps laminate plus would be ideal. £51 per sheet from Wickes. Can't see any problem with damp as the extruded foam backing would act as a vapour barrier. I just used this product on a cold wall in my house. Dabbed it on and skimmed it. Fab product.