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There could be some confusion with terminology but the code section I cited required a grounded conductor/neutral at the switch box. This mean you can no longer just run a switch leg down and tape the neutral black.

You could run a 3 wire and just cap the neutral. However more commonly like the OP did you would run your feed into the switchbox and then go to the light from there, it just saves from having to have 12/3 around. This also causes a problem with dead end three ways where you now have to run a...

My bad I just assumed there was a disconnect which would still have a ground rod driven at it. You might check out the mikeholt forums they have a lot of good illustrations of electrical installations.

As a cheap fix you can get tandem breakers for certain panels if they are listed for them. My bad I just saw justsam mentioned half sized breakers sometimes known as tandems.

The cracks may be nothing to worry about but I would be upset if I had no vapor barrier if I were you.

Re: Gfci trips instantly If there are any fluorescent lights on the circuit they have been known to trip GFCI's due to leakage.

If that third picture is your load panel in your house it is only three wire, if you upgrade it you will need a ground as well after you leave the meter base. As Ace said Illinois, Chicago is pretty strict about what they allow ie. conduit ran through the house instead of normal romex. Check...

If you figured it out already good but for reference for anyone else if you are on the 2011 NEC code cycle you need to have a neutral/grounded conductor at every switchbox. 404.2(C). “Switches Controlling Lighting Loads. For switches control lighting loads supplied by a grounded general...

I have no ideas for the stairs but a killer build and great use of materials. I intend to build something very similar and being a bachelor will most likely live in it for a while. When I get the project off the ground will post pictures and will certainly take some pointers from what you have...