Just to give an update on my masonry heater's performances after 4 months of intensive use. We have used so far 7 steres of soft wood ( i think it must be equal to 4 cords?). For the first month or so we lit 2 fires/day. Since, we are down to one fire/day which allows the central heating system to kicks in for about 1/2h in the morning and the same in the evening. That takes care of the rooms which are not directly heated by the masonry heater. The bedrooms which are above the living room are heated by the masonry heater without problems. Our natural gas consumption is down by as much as 75%. As to our confort, well it is sensational. We have discovered radiant warmth and chances are we will never go back to anything else. Of course it does come with chores ( carrying the wood, preparing the fire..) but it is such a small price to pay for so many benefits including the immense satisfaction you get when you know you have done something for our planet.

It's not clear whether your chimney is exterior or interior, but some possibilities: The leaks are most likely due to faulty flashing. Even if the flashing was redone, there's no real guarantee it was done properly. The flashing needs to be set into the mortar joints; this usually means using a diamond blade to create a groove in which to seat the flashing. Most old time masons would say that paint is the worst thing for a brick chimney. The paint inevitably traps moisture which then freezes and causes the spalling. Left alone, brick forms its own weather resistant surface - there's lots of brick in excellent shape after centuries of exposure. Anything added to the brick such as paint or sealer prevents the formation of the protective layer and is counter productive. Burning gas does produce chemicals which can attack masonry. This might be a good reason for installing a stainless steel liner but such a liner would not have anything to do with the leaks or spalling. I'd look for a mason who specializes in historic restoration. He/she should have the knowledge and experience to evaluate your chimney.

Sounds like you're flue gases are getting too cool, especially if it's an old, tall chimney. Get rid of that Magic Heat, it is taking too much heat from the flue gases and making the problem worse. The condensation will destroy a masonry chimney but should,'t do too much damage to a stainless steel chimney liner. Also, it'd be best to make sure the flue is in good shape, get rid of the sags and leaks, and that the system is operating properly and is not overfired.

I asked about the performance of the current system because if it is adequate, the 4 ton would certainly be adequate. Since it is not, there is no way to tell if it is not doing the job because it is too small, or because there are other problems like duct leaks or inadequate ducts to the furthest ends of the upstairs runs. Insist on a full evaluation of the system including a physical inspection of the duct system, heat transfer calculations, and the adequacy of the size of the ducts for each room. You should see reference to "manual M' and 'manual D" Ducts outside of the house envelope are particularly problematic because duct leakage turns your HVAC system into a power vent. Even with very good ducts there is leakage and then there are room to room pressure differentials to deal with that can do the same thing. That is why Jackfre suggested mini-splits. That will be pretty costly for 12 rooms. Heat pumps will also be more costly to operate than gas furnaces in the current situation. I have learned on this board that in some areas the current building code requires a system for each floor in a home. That should tell you something about the difficult of heating and cooling two floors with one system. One of the most common complaints you see posted here is a big differential between upstairs and downstairs. To get heating and cooling right, you really have to move dampers when switching from one mode to another. There is just no way around the fact that you need more air flow upstairs in the summer than in the winter. For those that don't like the idea of a duct in the chimney, I understand that you would not want a duct in a working chimney. Is there any big problem with re-tasking a disused chimney for a duct chase?