existing flue tile and cutting into them

Since you must seal a clay thimble flush to the inner face of the flue tile, However, since the flue must be suitable for the class of service, just bust out whatever since hole you need, install a stainless steel liner with a ss thimble then cement in around the thimble. Done.

Simple job — just drop a gremlin down the chimney and have him cut the thimble opening from the inside out. When he gets to the basement, hand him the masonry tools through the hole and have him seal the crock to the liner before he comes back up. Don’t forget to tie a rope to the gremlin so you can pull him back out. 😄

OR you can do what I used to do. Tell the customer that they need a chimney man to install the new 8" crock and to look in the Yellow Pages for a good chimney professional in the area. (Do they still print the YellowPages?). Then call you when the chimney is ready for the new heater.

I only remember getting called on "sealing the thimble to the tile liner" one time on my entire career of oil and gas heat installs. I needed to shorten the first piece of galvanized pipe to about 8" so I could mix up cement and use my hand to lay that mud around the opening of the tile to the sheet metal. The inspector removed the vent pipe and used a mirror to inspect it. Go Figure!

After that day I tried to make that connection with some type of masonry product. It added about 20 more minutes to the job, unless you forgot it. the it adds 2 more hours with fast drying cement products. After setting the 8" thimble you need to wait for the cement to set up before you can connect the rest of the vent connector. I found a product called Struct-O-lite that sets up within 30 minutes, and started using that on all the removable vent connectors during maintenance calls.

@mattmia2
That is the information I got from a well-known chimney service company in Philadelphia over 40 years ago. I have used that product ever since. I would label it “Chimney Cement” on the 5-gallon bucket I carried on my service truck. None of my chimney connectors ever started to dry out or crack away in the 40+ years I have used that stuff, and not one time did any of those plaster jobs catch fire. I don't believe there is anything in that product that is combustible or flammable. I could be wrong.

Not “lots of systems,” but I have come across a few in my time. I remember one that was having a problem with a downdraft causing the pilot flame to blow out in the water heater. I told the customer to call a chimney service of their choice to have a liner installed.

It was a two-story Colonial with a 12/12 pitch roof, making the chimney top about 40 feet above the ground level where my ladder would be set. There was no clay liner, because they didn’t use them in the late 1700s. All the mortar was cracking away, and the residents were over 80 years old and had a hard time getting to the water heater to light the pilot—especially in the snow, since the boiler and water heater were accessed from an outside doorway on the other side of the rear kitchen entrance.

The chimney man they called was a knucklehead who was not even insured. He took a mirror and looked up the unlined flue and said, “No problem here—I can see clear to the top.” Then the son called me and said the chimney was fine.I needed to explain that the chimney didn’t need cleaning; it needed pointing or a liner. The guy they called only cleans chimneys and really does not know much more about chimneys than that.

The bottom line was that I ended up selling them a Pilot relight kit so that when the pilot blew out there was a good chance it would relight by itself. If the pilot didn’t relight soon enough, then the gas valve would lock out and the spark would continue until someone pressed the pilot button down. The spark would then light the pilot again without needing to open the burner door. After about 60 seconds the pilot button could be released and the water heater would work properly—until the next Nor’easter blew it out again.