$600 for water repellent for the top only and its water resistance is limited to more more than 3 years. Why not use a less pouris brick not needing water proofing. Get a hold of a mason for an oppinion about the condition. My chimney is 30 years and I have never had a cap

Get at least 2 more estimates.
The kind of work that they want to do sounds more typical of a 30 year old chimney with no cap than a 16 year old one.

sounds like complete bull to me. have somone else give it a checkuup and don't tell them what the first person said, preferably NOT someone in the same field, ie. a contact a reputable mason rather than a sweep. few people that burn much wood (or coal) use chimney caps especially ones with the wire mesh, all they do is catch creosote, and in very cold cliamates, the moisture in combustion gass will condense on them and will block draft and stop flow completely.

Advice you've already received about getting additional inspection/estimate is definitely the way to go. There are, however, a number of questionable parts to the sweep's pitch:
As you noted, there should be no chimney fire danger in a
just cleaned chimney.
"Damage to the internal structure of the chimney"? Highly unlikely in a tile lined chimney. Damage to the mortar joints maybe, but also unlikely.
The crown wash needs to be completely redone, but it will take a jackhammer to remove what's there? Hmmnnn...
Even if a good deal of water entered the chimney it would have drained to the level of the cleanout door. I see no way it would have destroyed the "structural integrity" of the firebox unless there is no lower level cleanout door and the mxture of water and ash simply seeped into the brick.
Damage to the damper assembly is possible, but usually repairable.
A gallon of silicon masonry waterproofing costs about 25 to 30 dollars. This leaves 500 plus for applying it.
I don't blame you for not wanting to pay for another inspection. Try checking with your local building inspector or fire department to see if they will do it for free.
Should the sweep's evaluation turn out to be total or partial nonsense, don't just let it drop. Contact the local Better Business Bureau at least.

Just wanted to say that this kind of attempt to rip-off does happen. I had someone come to inspect my chimney and sweep it and they came up with about $3,000.00 worth of work needed. So I didn't use the fireplace at all that season, and I had another sweep come out during the following summer. After sweeping he said "looks good up there, you must not use it often." hmmm So, I had someone come out to give me an estimate of replacing everything, even in the firebox. After inspecting for about 10 minutes the guy asked me why do you want a new fireplace -- just for looks? Because it's nothing wrong with this one. I figured this guy had the most incentive to sell me a bill of goods and he told me nothing needed to be done!

Did they happen to put their findings in writing or was it what they told you verbally?

I 'd get a 2nd opinion & the person's license number, I then would chek with the www.bbb.org, State Department of Consumer Affais & possibly the Department of Professional licenses and permits. If you see any complaints or unresolved cases , you'd might be a little wary.
I would most definately get a 2nd opinion. People get flim-flamed every day. Most caps cost no more than $100

Tell him to give you a written quote of his findings and his costs, on his letter head. Be sure to tell him you would need to get at least two other quotes before committing that sum. I have a feeling lots of lies will peel away.