Rob at my old house, i had 100+ games in the basement. Not a walk out either. And we did dig a basement extension, so i can tell you all about that gig. Sold the house (as you know), and bought a new one (half the size, but walk out basement.) You'll see it soon with the upcoming Ann Arbor pinball show "thank you" party.
But at the new house I re-did the basement. they had a drop ceilings, took that out and threw it away. Then just painted the ceiling black. very industrial looking, and gives maximum head room (for that white water topper.) Also put plugs up in the ceiling for neon and other nick-nacks. dry walled the walls. well kind of...
something you may want to consider. Since dry wall SUCKS i did a compromise. Used T111 on the lower 4 feet (no finishing, not even paint, it's pre-painted!), and dry wall on the upper 4 feet. This minimizes the amount of dry wall and associated work/dust. Also the T111 is removable. So if you get a flood, or want to add another outlet, just a few screws and it's easy to do that. Also the T111 is very durable, doesn't dent like dry wall. We did this at the VFW too, in the front section where the wood rails sits. You don't even really see the T111, as the games hide it.
Another thing i wish i did was to use corrugated metal instead of dry wall or T111. For example check this out:
http://www.menards.com/main/building-materials/pole-barn-post-frame-materials/steel-panels/8-corrugated-galvanized-steel/p-1936298-c-5717.htm
there's also mini corrugated steel:
http://www.menards.com/main/building-materials/pole-barn-post-frame-materials/steel-panels/8-mini-corrugated-galvanized-steel/p-1936293-c-5717.htm
The stuff is cheap and really cool looking. No dry wall dust! Though mounting outlets is more work, well, unless you run exterior conduit (recommended.) And you can have a "spray can party." That is, before you put games in, have all your friends over for a party. Give them beer. Lots of beer. Now give them spray cans and go nuts!
Ann Arbor, MI
The easiest path would be a walk out with the garage and driveway at the BOTTOM of the hill. 
