Thanks for your input, Renovator8. That fireplace has been through a few transitions. It was first an Isokern masonry like fireplace but to save some money we changed it to a b-vent on the plans. Once we placed the house on the lot, it became apparent that the b-vent pipe would be viewable from the street, and would have to be fairly high due to the slope of the roof. The initial hope was to hide the b/vent pipe from view behind the upstairs Isokern chimney, but the house is oriented in a way that it is viewable on approach, even though not seen in the front or back yard. We then changed to an direct vent. The whole reason for the direct vent was to not vent to the roof, so I would like to avoid that. We have a couple of options with the Montebello like running them behind a bookshelf in the dead space and then over a boxed bay bumpout, but the pipe is so big it may make it not feasible. I don't think we have enough rise available to run it over the master bedroom tray ceiling above, unfortunately, because that will vent out the side of a house above the a/c in a very inconspicuous place.

As far as I know you can't put a gas log set in a sealed firebox, at least you can't in AZ. A good option that we do down here is to install a wood burning f/p with a gas log set. There are some nice wood fireboxes and some really nice log sets that look like the real thing. Most wood fireplaces bring in outside air to burn and you shouldn't have any kind of smell.

IMO, go direct vent. The top vent (regular chimney) is just that, a regular chimney pipe - a single pipe carrying combustion products out of the home. When using a regular chimney, the combustion air comes from somewhere else, usually leaky windows, doors, bathroom fans etc. To me that means you lose comfort (it's drafty) in those areas where you're pulling combustion air into the home. And the pipe gets hot so you have to respect the proper firecode installation rules. On the other hand, direct vent chimneys are double-wall pipe. The center pipe carries the hot combustion products out of the home and the surrounding outer pipe brings in the outside air. That cuts down on the drafts at doors and windows, plus the outside of the vent pipe runs cooler, so it should be safer from a fire standpoint (you still install it per the firecode). The safety of direct vent IMO would be higher. I don't think there would be any major difference between installation, cost, appearance of the fireplace, or flexibility between the two options.

Your furnace would not run properly if the pipes were not sized properly. Is your furnace giving you problems? The installation manual will have a sizing chart in it. Every manufacturer is different. For the brand that I install, the size seems right.