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Default Fireplace / Chimney Question

The other week I had a fire going in my family room fireplace. Shortly
after starting the fire, I noticed the smoke was backing up in the
chimney - and the whole downstairs was quickly flooded with smoke.
This is the second time in a year this has happened. After the 1st
time, we suspected it might be a negative pressure situation, so I have
been sure to crack a nearby window every time I start a fire ... guess
that doesn't help.

I decided to have a CSIA certified chimeny sweep come out to clean the
chimney and inspect the chimney for safety. He offered to install two
caps on my chimney (on the fireplace and furnace crowns), which I had
him do. He though the smoke backup was probably caused by blowing
winds, and said the caps may help that problem. He gauged the
clearance and height of the chimney, and said it was up to code and
that probably wasn't the cause of the smoke backup.

Now here's the real issue: During the course of the inspection, he
noted that the crown on the chimney was crumbling (which I knew about
already). He also noted that there were gaps between the chimney flue
and the firebox, where the box narrows into the chimney. The gaps are
not holes, but it's clear there is some masonry which is either rough,
or crumbling.

The chimney sweep (also a fireman for a local FD) made it sound as if
this was a potentially severe problem, and recommended that I not use
the fireplace until getting it fixed. Of course, he had a solution
ready to go: to use some product called "Smoketite" to seal the gaps.
Cost $500.

I hate getting inspections and repairs from the same people, as the
potential for abuse and fraud is too great. Does anyone know if this
truly is a problem or, better yet, if the repair he's suggesting is
worth the $500. Being the holidays, cash is very tight ... but I
really enjoy my fires this time of year.

Any insight appreciated !