Go with the first guy for the @2200. Then have the inspector come back and inspect the chimney again.

Do have him put a liner in the chimney.

Marita, when living in St. Paul, we had this predicament:

Our house was a 2 story 4-square. The chimney was brick and had 2 flues running up it, one from the furnace and one for the fireplace. The 2 flues were virtually touching. In order to have a flue for a wood burning fire, we would have had to remove brick midway up the outside of the chimney, then break up the pieces of the fireplace flue and rebuild it. However, because the 2 flues were almost touching, the restoration fellow said that the odds were high that the chimney flue would also break in the process (both flues were made of 2 ft long pieces of terra cotta tile, mortared together). Then through the outside opening and also from inside the living room, they would reline the smoke chamber which is between the flue and the firebox. We needed the smoke chamber relined as the parging had crumbled off in chunks from it's walls. Our estimate was to rebuild both flues with a compacted volcanic ash product, to reline the smoke chamber and then use the old brick to close up the hole in the chimney. We had already had our firebox tuckpointed for $500 (I think that was the amount). The estimate we received for the flue/smoke chamber was $7500 and it was given in the fall of 2003. We didn't get the work done that fall, and ended up moving in the fall of 04 so the work was never done. We had other companies out and were told by all that just dropping a metal liner would not provide the heat protection needed. The estimate I've described was also high because of the 2 flues and because we were concerned with restoring the chimney brick so that it didn't look patched. Yes, we about gagged when we got the estimate but for that chimney, we really wouldn't have had a choice. Good luck with yours. I would definitely get a few estimates and spend some internet time learning about fireplace and chimney construction.

I can't find any records yet of who we got estimates from. Is your situation anything like this?

There are systems - SupaFlu is one - that are used to line chimneys by casting the liner in place using a proprietary mixture based on Portland cement. I've had it done. It works fine and significantly strengthens the chimney - it flows into any mortar voids - and is self-insulating. Not suitable for every application and not available everywhere, but worth checking into. It would certainly be cheaper and safer than attempting to replace the old terra cotta tile.

Rain caps are often more trouble than they are worth and can reduce the draft so much that you get a great deal of smoke in the house. I'd also ask why the chimney needs rebuilding from the roof line up. Sounds like the first estimator thought tuck pointing would be sufficient, which it ought to be unless the bricks themselves are crumbling - not very likely.

All in all, the first estimate seems much more realistic than the second.

The amount of water added to the poured-in-place relining slurry "systems" is such that a lot of people have experienced paint peeling problems on the plastered-brick chimneys after the treatment. All that water has to go somewhere, and it moves toward the dry side, and it takes off paint when it moves through the plaster.
Just a heads-up if you have old plaster and are considering this.
Casey

I would call the first company, tell them what the second company said, and ask them why they feel a rebuild is not necessary. They should not resent this (if they do, it's a bad sign) and should be quite happy to explain their reasoning.

Well, I did just what Chibimimi said. I called the first company today and told him about the second. He explained why tuckpointing would make the chimney "like new" because the 100 year old bricks are in good shape. He explained it well and I now have full confidence in them. They offer a 15 year guarantee which is just fine by my book. Again, this guy has over 100 superb local angieslist ratings and he's booked my job for two weeks from now. Just kind of mad at myself for the money wasted on the second opinion (money is tight right now!)

Thanks to all for the replies. Onward and upward.