You can do it either way. You could install the wood first and all the marble after. Or you can do the whole thing and put the wood over the marble. The second method will be more expensive snce you will need more marble. On the other hand, the installation of the marble will be easier since you won't have to cut around the wood. Either way you can install the wood surround and mantel using the correct construction adhesive (see label on product) or attach it with screws (or even use both). My preference is to use at least some screws. If you use screws, get some lead anchors and drill into the brick/marble with a masonry bit sized to match the lead anchors. The screws then go into the lead anchors and will hold fast. Also, make sure that the clearance from the wood to the fireplace opening meets the minimums prescribed by your local building code!

I built a surround, mantel and overmantel using MDF, various moldings and honed travertine tiles (filled). I don't know how to post pictures, but, if you e-mail me I'd be glad to send you some. To answer your questions: You can install the travertine directly on the drywall using fortified thinset (don't buy the pre-mixed kind). Just make sure the drywall is well anchored, I drove some extra drywall screws into the studs before installing the travertine. I didn't seal my tiles, but, the honed finish is smoother than what you have. The reason to seal before grouting is that the sealant acts as a grout release and makes it easier to clean the grout from the tiles. With rough tiles I've found it helps to keep a water spray bottle handy which you can use to flush out any grout that gets in the holes before it sets. 1/8" spacing is good, however, if your tiles have rough edges you may have to go to 3/16". On the hearth you need plywood for strength and then you should put down some wonderboard or hardiboard. This is because code usually requires at least 1" of non-combustible material on the hearth (check your local code to be sure what the requirement is). You meet the requirement by calculating the thickness of your tile plus the thickness of the thinset (1/8' - 1/4") plus the thickness of the cement board. You should err on the high side. Hearths can get pretty hot, so the thicker the non-combustible layer the better (it acts like an insulator). Also remember to check your local code on the required clearances from the firebox opnening to the mantel and surround. In most jurisdictions this is 12" (for non-combustible materials). I used some corbels that are closer but I bought some made out of molded stone that are non-combustible.

No you can not install granite, ceramic or porcelain tile over any type of tile. It needs to be removed and prepped for the new granite. If cement or concrete board is installed over the old granite then you can retile it without removing the original tile but there is no need. It is not a big deal to remove the old granite, you will be very surprised how easy it will come off. At 30 ftsq we are talking maybe an hour or two for 1 or 2 labourers with a chipping hammer on an average size fireplace to remove it. That seems to be a very high quote, however without really seeing the job it wouldn't be fair to the tile guy to dispute that quote. edit: I must add if the cause of the original tile cracking it will likely crack again. Is the quote include addressing the cracking issue as well?

Omg I LOVE Rookwood tiles! Yours are just gorgeous. Yeah, situation with the contractor is bizarre! Rookwood is fabulous. I spoke with their designers and they were able to design the layout fo the tiles for me based on my budget and what I was wanting with the roses and leaves. It's not bizarre. it's either that he hasn't a clue how to lay tile or more likely doesn't want to spend the money on a talented tile installer. My tile installation if I recall took a full day just for the tiles. Then grouting took another bit of time.