Thanks for everyone's advice, I did listen and installed a new header
at the top of the ceiling. Not a huge deal, nothing a small sledge
hammer couldnt overcome! ;-)

Check the site for updates, I just finished sealing off the top of the
chimney using some galvanized sheet metal to cap it off. Now I can get
to the fun stuff of actually building something that people can see...




Heres some pictures:
http://home.earthlink.net/~peverheart/fireplace.html