I live in North Dakota and my garage floor is a couple inches below ground level. Every spring I get water in the corners of my garage. What can I do to prevent this? I am hesitant to finish sheetrocking the wall because of this.
First, you need to determine the source of the water. If it's developing as the result of rain, you need to prevent that water from coming in with proper exterior drainage.
From a drainage standpoint, there's really no difference between a garage a few inches below grade and a basement a few feet below grade. If you don't have gutters, or if your gutters are clogged or dumping water within four feet of your home, the water's going to end up inside. So address the source of the water first, and only after you've figured out and fixed the problem should you proceed with remodeling.