I appreciate the comments/suggestions for repairing my chimney and thought I should provide some feedback after actually making the repairs. Although time will tell, I repaired the chimney by initially filling in the deep divots with surface bonding cement-- about $14 per 50 lb bag at my local building supply store. It has fibers in it. For the deeper divots in the brick I had to apply a second layer. I then covered any remaining exposed brick with a thin coat of the bonding cement. There is some "art" to getting the right consistency; but it does adhere to a vertical surface. I allowed it to dry for a few days and then "painted" on a batter-like consistency coat of Thoroseal ($33 per 50 lb) with Acryl 60 admixture. When I return in the fall I will give it a second coat. Thanks for your comments!

Have you tried shrinking the opening height? Some older homes have fireplaces with rather tall openings. Having made the volume of the chimney smaller by adding a liner would also change the appropriate fireplace opening ratio necessary for a good draft. Sometimes adding a smoke guard at the top of the opening will help. You can test this by getting a piece of plywood or something 8" wide or sheet metal and holding it across the opening after building a fire. Sometimes adding fireplace doors with a wide frame at the top will handle this too. Doors give you greater flexibility in the ways you can deal with smoke. You may be able to burn a fire with the doors closed and get better draft because you change the air to fuel mix. Can you post some pictures of the fireplace?

Most people (myself included) will not links that take you off this page. Please post the pics here.

I can only say that we paid many times that for a similar project in California four years ago (though ours took the chimney all the way down to the hip and rebuilt it up from there, so a bigger scope). We also (separately) replaced the chimney footing as part of foundation replacement on that wall at the same time--the water had seeped through the chimney into the foundation. Language around water is pretty par for the course based on our experience. We first had our chimney caulked and sealed (maybe five years before doing the bigger project, knowing we were just buying time) and they were very clear that unless we rebuilt the entire thing, there were no guarantees. (We haven't had water intrusion since doing the partial rebuild, but do still have some movement in the fireplace brick so will probably need to do the whole thing at some point. But we never use it anyway and it's at least no longer in danger of collapsing on us, so good enough for now, and it's integrated into original built-ins inside the house that will all need to come out if/when we pull out the fireplace, so a much bigger project.)