B. Take out the flagstones and try to sell them on ebay, lay a new 4"
concrete floor for the parquet flooring.

I'd be thinking 'B'. Whilst I'm all for keeping original features,
flagstones in the lounge would be a step too far unless it was the sort of
genuine country cottage that really benefits visually from them.

If you are redoing the floor, you should really be insulating it too. I'd
consider laying underfloor heating pipes at the same time so you can save
yourself wallspace from the radiators.

Christian.