How can I paint concrete blocks without trapping moisture?
Seems like a shoddily built roof. So, I think the roof will fail long before painted walls will cause a problem.

It sounds like the outside paint is already 'breathable' if it's absorbing water and capillary action is bring it to the inside. As such, I'd argue that waterproofing the interior is a good thing. Keep the moisture in the wall and allow it to dry to the outside.