Rather than relining the chimney, I'm biting the bullet and just going with a HE tankless. The existing Water heater appear to be 14 years old anyway and it only a 40 gallon unit in 3 bedroom a home with 2-1/2 baths. It hasn't been an issue, but our daughter is only 3 years old. I know we've run out once when we had company over.
The real upgrade will be the recircualtion loop I'm adding with it. IT will also include replacing some remaining galvanized pipe. Some if it we might push off until later depending on where we're at on costs.
I selected a Navien NR-240a which is a 200k BTU, 97% efficient unit with a 1/2 gallon buffer tank and integrated circulation pump. IT vents using regular PVC, not soem fancy overpriced spcilized vent kit that I think Rannai and Takagi require. Not cheap at $1700, ut that includes the service valves, PRV and again, the buffer tank and circulation pump. Looking online my plumber is getting me a godo deal. I don't think he's marking this up much if at all since it's one of his first installs of this particualr model. But I've done my research and I'm comfortable wth his vele of expereince and knowledge with these units.
FO rhte systme ot operate best, you actualyl set the water temp much lower tha nyou would a tank. Basically, somewhere aroudn 108-115F rather than 120-125F. The major thing that I'll have to get used to is that in msot all cases, when you want hot water, you won't need to temper it much if at all. But your goal is to maintain maximum water flow rate through the unit when possible.
The one dissapointment was discovering that my chimeny has 3 sections and that there's a jog 1/2 way up so it won't be feasible to vent up the chimney to the roof without using an expensive SS flexible liner and not direct venting. So We'll have to rearrange the existing PVC vents for the furnace that go out a basement hopper window. Not the greatest set-up since you can hear it a little downstairs and get the water vapor comming out. It's also near the condensers.


