[jshilan]

It's hard to tell from your description if you are actually using concrete block (not cinder block as was pointed out) that should be wet laid and is typically used for foundations and other masonry work. Or if you plan on using the CMU type of retaining wall stone that most landscape contractors use. If I had to guess, based on your description, it is the latter.

The process that you are describing is not correct and will not make it through a couple of freeze thaw cycles before it starts to move. Rebar is typically not required, and as per natural12 you need gravel, pipe and fabric for drainage, as well as at least a gravel or other appropriate stone footing. If the units you are using have voids that are to be filled with gravel, fill it with clean gravel not the existing clay soil.

All of the catalogues have details on how their walls should be built and I suggest looking through them and do a little more research before you do the weekend warrior thing.

See if you can get us some more info about the brand of stone etc. so we can guide you better.

Nice computer graphic for the walls.