You'll be fine with that flue. That's a standard 8/8 tile flue and the ID varries from 6.5 to 7" depending. You'll have no issues with the flue diameter, but be sure you stack is built correctly for optimal operation. It should be 2-4' taller than the HIGHEST part of the roof, if it's not you will have mediocre draft in moderate outdoor temps, poor draft during low fire, smoke pouring out of the loading door, poor performance (heat output) from your furnace and likely draft reversals on "bad air" days. If your stack isn't high enough, fix it now and have a pleasant experience, don't wait until you have an issue or, at the least, mediocre performance before having the stack height remedied. Good luck!

Anyone know anything about Shaver 165 outdoor furnace. Do they work as advertised?

There are a few things to look for in an outdoor wood furnace. First be sure that it has the proper safety certifications; UL, Warnock Hersey, or CSA. Buying a wood furnace without proper certifications will only cause hassles with your insurance company. Also consider the length of time the manufacturer has been building furnaces. Not just selling them but BUILDING them. There are a few companies that claim to be leaders in the industry yet have only been building their own furnace for a year or two. Avoid them. Even their name may only be three or four years old. Find a manufacturer that has been in the industry as long as their warranty. How can a company that has been building their own furnace for a year or two offer any validity to a twenty year warranty. Another thing to look for is "simplicity." A simple round firebox has the fewest welds and therefore a much less chance for weld failure. Buy a unit with a 1/4th inch thick steel firebox and water jacket. Stainless is not necessary with the advancements in water treatments for protection from corrosion. Make sure you buy a furnace with a forced draft also. It will burn far more efficient than a natural draft furnace. Yes, I sell wood furnace but I am not here to sell you a furnace. I would rather educate you on some of the important facts about them. I have been in the industry for over five years and have installed over 150 units. Just pay attention. If it sounds too good to be true, "It Is."

I have a Heatmor and it's fantastic. I felt the need to comment here because of what "Freedom of Air" said above. First, my furnace smokes very, very little. It's a clean burning machine. Just follow best-practices and burn seasoned wood. I have never had a problem with there being a lot of smoke. Secondly, and most importantly, the ultimate level of pollution and environmental impact of burning wood is FAR LESS than that of burning natural gas, oil, or any of the other "clean burning" fuels that they'll try to push on you. Yes, natural gas burns cleaner. But once you factor in natural gas's mining process (linked closely with coal mining, mountain top removal, and long wall mining), refining, transportation, construction of infrastructure for delivery, and consider all the wildlife habitat, national forest, coast lines, and communities that gas/oil/coal mining and production destroys, you'll find that burning CARBON NEUTRAL, locally-obtained, renewable wood has FAR less impact on the environment. Wood is definitely the way to go, and these furnaces are an excellent choice.