After reading this I was intrigued; and basically people are saying to drywall over the existing stone.. just double check with safety codes for your area (making sure nothing combustible is within 9-12" of the fireplace, including furring strips and drywall). If you then plan on purchasing meshed stacked stone the installation should be considerably easy. Hope that helps some.

Hello All! I realize that this was fifteen years ago. But if there is anything new, please let me know. I am having the same issue. I did the flooring myself and did undercut. But the carpet was pretty much attached to the bottom of the hearth and much cement came right out when I was ripping out the carpet. My LVP sits much lower than the carpet did as well. My Fireplace installer has passed away, so I cannot ask him. I’ve been researching grout, but am afraid that I cannot match the original color and it would not adhere properly. Could the original poster, please send me photos, if available? Look me up on Facebook please? Lisa Dachel West. And send me a pm? thank you!

Needs to be non-flammable, you can google the table of clearances around fireplaces. I can't tell what your exact thickness is, but you could build it out with masonry (another layer of bricks, for example), steel studs and durock facing for the tile, a stack of durock sheets to match the thickness if it's thinner, a sheet of stone, maybe even wire lath and mortar. Whatever you plan to do I'd check it out with your building inspector before proceeding, they tend to have firm ideas about fireplaces.

RES - that may be true for codes in your area and general national codes, but there are at times local codes that says differently. Always good to check before spending a lot of money. I think putting the patio down has caused the issue with needing steps there and eating into the available patio space. Steps down from the patio would have been preferred with the design or the design taken the drop into account from the start for anybody reading this and are at a point in the project where they can fix it. At this point it will be awkward with the placement of the fireplace no matter what you do unless there is the possibility to move or not keep the fireplace. Another option not mentioned is to create a landing in front of the door that also includes that corner spot and then turn the stairs to go alongside the house instead of in front of the fireplace or make the stairs go in all directions from that landing. I think the last part is what I'd do. Then the corner space can be used to put some pots of plants in that corner and the stairs going in all directions will look a little less off and more intentional. Kind of like this deck has steps all around - https://cdn.homeadvisor.com/files/eid/19330000/19335529/1885810_ddetail.jpg?modifyDateTime=1430870981000