My Canyon (2 miles from Oakland) CA friends don't believe in insulation,
nor anything else in the building codes :-)

For folks who don't know the Bay Area, Canyon, CA is a famous
place. Check it out:

http://maps.google.com/maps?oi=map&q=Canyon,+CA

It's the green spot between Pinehurst Rd and Shephard Canyon
Rd, right in the middle where it looks like there are almost no
roads. If this guy's got a view of the bay, then he's probably on
the south-west side of Manzanita Way.

Decades ago, a bunch of people decided to build there against
the official wishes of Oakland. They build houses and I think
even short roads, completely without city support. I think they're
on-grid now, after decades of wrangling, but maybe not.

Anyway, I just wanted Nick to know that just from riding around
in the area I can say it gets a *lot* colder there at night than it
does in San Francisco. This guy probably has a monster furnace
because that was cheaper than insulation back when the house
was slapped together.

Nick Solar house heating is _extremely easy_ in SF.

Solar house heating *during the day* is easy near SF. It's the
nights that get you. This guy's probably got 800+ ft^2 of glass
and probably sees days of 20+ degree-days heating. That's
400k BTUs a night just through the glass, he might have to
double that for the total (tons of fresh air). The furnace is just
a bit oversize for such a leaky house, but the house is a bad
design in an environment of pricey fuel.

And thermal storage is hard. Note that this guy is sitting
more-or-less on top of the Hayward fault, probably on a sloping
lot with poor footings, and probably has fairly weak construction.
Placing a few dozen tons of thermal mass on the second floor,
nevermind the ceiling, would be irresponsible (although very
much in character for the neighborhood).

If he's seriously lucky, he's got room on the north side of the
house for some thermal storage, maybe even a basement
cut into the hill with a floor that can take some load. If that's
the case, maybe he could get some sort of loop going
between the downstairs storage area on the north side and
the upstairs southern living space.

Nick ... 255K Btu/h for 3200 ft^2? Does this house have walls?
Nick :-) You probably need a blower door test and more
Nick insulation.

Yep. That could make a serious dent in about half the problem.
But that glass is going to be expensive to replace. If he's near
broke, I think it might be reasonable to consider insulation
against the glass at night. Ugly, inconvenient, and cheap.

Nick Congratulations! You have a solar-heated house! It needs
Nick more thermal mass, maybe upstairs or below the ceiling,
Nick with an insulated wall between all those windows and the
Nick 24-hour living space and airflow between the new
Nick "sunspace" and the living space that stops at night.

Your low-mass sunspace is probably a nonstarter, as it would
mean he has to give up a sizeable fraction of the house for all
but ten hours of the day (and most of those hours he's not home
during the weekdays). My guess is he's got the master
bedroom on the south side as well.

Nick You might "open windows" with a thermostat and an
Nick exhaust fan...

Yep.

OP I am looking to cut costs b/c I'm pretty broke right now,
OP but not at the expense of safety, comfort level, or
OP decreasing the value of the house by not getting the
OP right furnace installed. Meanwhile we have no heat,
OP and I've no idea which (if any) of these contractors I
OP can trust.

Nick My advice: forswear thy fossil fuels and improve the
Nick solar performance. It's easy, with high-school physics
Nick and simple arithmetic.

Thermal storage will cost a lot more than a bigger furnace
and burning more fuel, especially in the short term.

My advice:
1) More insulation, especially attic insulation.
2) Blower test, and then patch those leaks. This could lead
to getting a new door or something, but hopefully it's just
weathersealing. PG&E might pay for the blower test.
3) Thermostat-controlled exhaust fan, for those hot days.
4) Insulation on the windows at night. This is ugly, but maybe
you could do something creative like have interior shutters
that hinge down from the ceiling with a drawstring. The
insulation could be 2 inch thick extruded polystyrene slabs
covered in cloth to make them look nice, and also to help
get a reasonably airtight fit between the insulation and the
window frame when deployed. This could save 2-3 therms
($3-5) per night, if you're disciplined about getting those
shutters down every night before you go to bed.
5) Sweaters.

A big furnace is going to be cheaper than thermal storage.
My wild guess is that you're now burning 1500 therms/year
for heating. You can probably get that down to 600-700
therms/year without thermal storage, assuming the window
insulation. So that says you can probably get away with a
half-size furnace, maybe 100k BTU/hr. The money you
save versus a replacement 225k BTU/hr furnace might
offset most of the cost of the insulation updates.