If the heat exchanger is for the hydronic baseboard, I don't know how
sludge can be an issue since the water for the baseboard is seperate
from the boiler water. I had this set-up in my old house.
I had another house with a different set-up. I had a steam boiler with
hydronic baseboard in the basement. All I did was tap into the return
line for the boiler, ran a loop in the basement and put on a
circulator.
Both of these set-ups required hooking up an aquastat to make sure that
when the baseboard calls for heat, the water is at least 180-190
degrees.

also a few questions:
Where is the baseboard in your house? Basement, upstairs?
Does the steam part heat OK?