Its ruining my siding anand rotting the wood behind

If the area under the decking is accessible, you could bore a hole (need a hammer drill) through the blocks and continue the drain line to the other side of the deck. Is there a reason it doesn't connect to your DWV (sewer) system?

I have a septic tank. I was under the impression that it was bad for the septic system?

If so, then finding a way to run piping from the basement to another location outside would seem to be best.