I am so sorry!!! It may be too late for this but have you considered an Isokern style fireplace? It is a masonry look (can't tell the difference) but it is a third the cost. It came highly recommended by my architect (who builds very high end homes) and he says he uses them all the time. They work very well (there is another brand also that looks and works well) and helps with the construction issues inherent in true masonry fireplaces.

The problem that you are experience may be the reason the previous owner installed an insert in the first place. The only cause for the smoke that I can think of is that the first floor fireplace flue may be undersized for the firebox opening. But that isn't even 'for sure'. I would suggest seeing if you can get a certified chimney techinician out (he/she should be very familiar with chimney construction and physics, how they work and why) and I think it would be beneficial if you can find someone with video scanning capabilities that way you can have the internal condition of the chimney inspected so you can rule out any damage to the lining. Here is a link that might be useful: Chimney Safety Institute of America

There are many factors that affect how well a chimney will draw Size of firebox to size of flue liner , height of chimney flue , properly built smokeshelf, opening size of fireplace facing ,downdrafts caused by taller structures or tall trees near the chimney, etc . I have built many chimneys with slight angles in the flue liner, in fact with a 2 story house that has a fireplace on each floor and only one chimney the smoke chamber has to be corbelled over enough to to bring the bottom fireplace flue far enough over for clearance for the upstairs fireplace, It does sound a little funny that the designer would want to bring the flue over that much in order to "support it" any angling should be done within the internal structure of the chimney. Having said that we have corbelled chimneys over inside the attic before but only by a small amount and only as a last resort. Cheers Martin

It is not uncommon in older homes to find that the masonry and timber structure works together to support the load of large fireplaces and hearths. It's not ideal for a few reasons, most importantly - the proximity of combustables to the firebox and flue. The larger fireplaces sound like excellent candidates for a smaller, more efficient rumford firebox and new TILE liners installed from above. Reducing the firebox dimensions (firebox within a firebox) will give you more clearance to any framing, raise the hearth to increase clearances there and slide in a tile liner, use a hose every few tiles and pour in a slurry solution of 6 parts vermiculite to one part type S masonry cement between any gap between tile and masonry chase. It will be a lot of work, but you know that if you've done that kind of work before; the bright side is you'll have safe, efficient, and value-adding functional fireplaces in the home. Also one of the reasons many of those older fireplaces were closed off/plastered over is there was no damper in place, so when central heating came about they caused the house to be drafty and inefficient.