Hi, Shannon, There are a number of things you can do to seal the flue. One is an inflatable device. Not sure what it's called, but essentially is a balloon that you place and blow up. Another option is to get an old, large, foam rubber pillow, or even a big sheet of foam rubber, and jam up into the flue. As for the type of damper that you're describing, it sounds like that is the damper plate, on which the actual damper would rest. The slit is probably where the damper was pivoted so that it could slide open or closed, and the larger voids is where the smoke exits.

Are you doing a major remodel or something? If it were my house I would consider making what is now the Living room into the dining room and what is now the dining rom into more kitchen and let te family room be the new living/family room. or make the family room into the kitchen......

Brian, no need to be a 2 year old in a rhoid rage and take your toys and go home because you didn’t get structural advice on the internet like you wanted. That is unrealistic. No real professional would ever advise from a bad picture or two. It takes an on site paid consultation. When your house falls down, you’ll wish you had called a Pro. If you want to DIY, call the structural engineer yourself. But if you don’t understand the solution, then call a contractor. If you’re one of these scofflaws who doesn’t want to officially permit this, then you just made that house uninsurable and unsellable.

You can try a chemical paint remover with a power washer, but NO SANDBLASTING. It will rip the face off the brick. The question of whether it will work is largely dependent on how porous the original brick was at the time it was painted and whether a sealer was applied before hand (unlikely). Try it what do you have to loose?