My new plan? I'm not going to mess around this time. I'm going to use concrete--just like they usually do when dealing with culvert pipes under highways and such. I'm building a form for a 10-inch thick concrete retaining wall to cover the back wall and extend beyond it to hold up the future hill around it. The form will include an opening for the window and ventilation. This will be reinforced with some rebar. Yes, it will be ugly and un-hobbitlike at first, but don't worry, I will make it round on top and cover it up with a nice façade so it won't look like a culvert.
If only I had thought of this method in the first place! Oh well. Live and learn. That's what you get when you are an amateur taking on a job like this. Not to worry, though. After all, Bilbo and Frodo were amateurs too, when they first set out on their adventures.