I clean the stone really well and paint it white.

Are you handy? If so and if you can spare a little cash I think you could put slate over that stone. You may have to install cement board and then you could install slate tile over that. Just be sure to seal the slate before you do the grout as slate is porous and a huge pain to clean grout if you have not presealed the slate. Often you can pick up the slate for $1 to $2 each at one of the big box stores.

I'd think about spray painting the metal fireplace front. Also would concider framing in all that rock and sheetrocking and painting if on a budget. You could paint the door the same color so it blends. Or you could apply a wood feature wall on the sheetrock if wood is your thing. When framing to could wire for tv and create different niches for decor and mix things up that way. I'm really curious how you will work this!

What type of person does work like this? Should I look for a painter or is there a person that does fireplaces specifically?

Call me crazy, but I like the character. I would paint the door and trim to try to make it match as close as possible. Then I'd paint the mantel and the iron fireplace screen a very pale shiny gray. Finally lose the glass accessories and get some brightly colored accessories. Turquoise or yellow or white glass or ceramic. Lovely

Find a reliable contractor to recommend someone. I concider it a DIY project but if you want to hire it out you should be able to find affordable capable help with advice from a pro.

If you decide to keep the stone, with a good cleaning and Blue's color choices and paint ideas, you'd be in good shape. Oh, I like the glass and candles. Blue's ideas are a very affordable and fast fix.

I would start by covering the odd section of over the door to make the fire place have 2 straight lines on either side. Then I would apply gyps or mdf to cover the top part of it and leave the bottom in stone. Then I would increase the hole thing with 2 linear boxes of MDF that will now delimit the mantel. To finish, I would construct a massive horizontal mantel in mdf and install it to hide where the stone meets the gyps. And then of course I would paint the mdf in white (the same color as the door). You can even create a media center incorporated in the side of the mantel like the the inspiration picture. Hope that was helpful.

For more contemporary, on a budget, paint is your best friend. You can do it, just buy paint for masonry - here's the kind of taupe you want http://www.sherwin-williams.com/homeowners/color/find-and-explore-colors/paint-colors-by-family/SW7038-tony-taupe/ The grout will take a special brush and patience to get good coverage unless you hire a pro. Cleaning and priming is the big job. Put the paint on is easy. Get a quart of regular paint in the same color to do the door and frame matching. In this case, choose them both with low sheens instead of high sheen (usually you would use this on brick or on doors and trim but not here).

The taupe will work with your black mantle, andirons and screen.

Eventually, consider painting / washing (paint and water mix) each one of your beams this warm color to tie it all together. Your walls would look better then with one topcoat of a better white. Here, aesthetic white is the white on the card with the taupe. http://www.sherwin-williams.com/homeowners/color/find-and-explore-colors/paint-colors-by-family/SW7035-aesthetic-white/ (same undertones as the stone paint - warm and will make the room come together - since your materials are rustic, you want more natural tones - your white walls and trim now are TOO white) Leave the too white ceiling between the beams.

First thing is to paint out the door and trim "in" it to a charcoal gray black tone. Eventually, you may want to gray wash your painted out white beams - if they were more like the beams in YoungHouseLove.com 's family room, it would all start to tie together. I do think painting the mantel is a good idea.

Keitha's door idea is brilliant! Blue's idea of a beefed up gray mantel and screen (to complement the ceiling beams) is also a great idea. Follow these two ideas and the space will feel cohesive and stylish. In this case, painting the rock doesn't seem to be a good idea. It will just look like trying to disguise something you don't like. Soooo, enhance it. :) BTW..I have a rock FP too that I'm not crazy about so I have no mantel at all and a black custom screen to fit inside the "box".

@ Darzy...Thanks for the compliment !

As I see it there are two ways that you can accomplish a better look for very little money. The first is to clean the away the soot , a spray bottle of vinager and a good stiff scrub brush . Wash out your brush often. After its clean you can do one of two things : you can whitewash it , mixing 1 part paint to 3 parts water . You'll need a a bristle brush and some rags. The paint will be thin so blot it with the rag. You can add paint if the coverage isn't what you want. Second is apply plaster and cover the intire thing . You can even mix in the paint color of your choice . Either way will make the dark devil disappear . I have to ask , is there things in that closet ? If you can spare that space , take the door off and make it a bookshelf . You can line the back with some great wallpaper , and get some cute baskets and /or candles . I've attached some pics to help with a visual . Hope this helps.

Plaster over the area completely

Closet ideas

I would keep the stone but make it brighter and fresher by brubging in light sbd teflecting it all aroind. New thick wood mantle with a big mirror in the middle and 2 pewter or chrome (ie shiny) lamps next to it. Spray paint the grill silver or chrome or pewter (use heat resistant paint). Blend in the doorway by either paint (dark brown or black) or wood (earlier suggestion) depending on budget.
When not using the fireplace brighten it up using fairy lights.

I've been following a post with a similar dilemma as yours for the past several days. The other people had a massive stone fireplace, much taller than yours. The general consensus among all the replies was to keep the stone. I think they've given up the idea of removing the stone. Don't paint over your stone, you'll ruin it. Give it a good scrub to clean it up. I have the same stone as yours. After a good cleaning, covering up the rough hearth with a concrete-type plaster, and removing the ugly black mesh screen, it's really beautiful. We also converted it into just a line of flames coming out of a bed of onyx fireplace glass. It's now a modern showpiece of my family room. Your most budget-friendly option is to clean up the stone and replace the thin mantle with a thicker one. Embrace your home's heritage!

Wow thank you all for your great ideas. I'm so grateful to all of you. I really like the idea of smoothing out the rock with plaster being that I really lean to contemporary. Oh and by the way the wood beams are coming down.