what makes you think it's leaking steam up your chimney? how do you know the boiler is "almost dead" ?? boilers can last for well over 100 years and the efficiency hasn't changed much in that time.

why did you say "corrosive steam" what are you talking about? why would you think that steam in any way is corrosive??

you setup is likely better than you think based on my experience with people viewing an older setup and simply assuming it is somehow faulty. post some pics if you can so we can better help you.

Berlin,

We have 2-3 holes in the boiler that are above the water line (verified by our HVAC guy). Steam is leaking up the chimney and repairing the boiler (which is oversized and inefficient) would be almost as much as replacing it. This boiler is only 4 years old but was installed incorrectly and had a leaky pipe for quite awhile before we purchased the house. Both of these factors could have led to the early demise of the boiler.

Steam itself is not corrosive, but the flue gasses condense because too much heat is extracted from them before they can exit the chimney. The resulting condensate has chemicals in it from combustion making it corrosive.

I am quite positive from lots of consultation that the boiler is almost dead and the chimney needs to be lined. The hitch is that we thought lining the chimney would cost about $1000 but the couple of estimates we've gotten have been over $4000! This seems outrageous!!

get more estimates. All i can give you is a baseline of information.
Materials
6" 25' roll of liner $300-$600 depending on guage.
labor is usually double the liner cost.