http://m.flickr.com/#/photos/65574314@N07/6032827680/

Here is a link that might be useful: fireplace

A thousand times NO! Do not paint that tile! Paint is flammable. The whole reason that tile is there is that it can't burn. Don't create a safety hazard and design disaster all in one!

If you don't like that GORGEOUS tile, then remove it very carefully and sell it to an architectural reuse store. There are plenty of people out there who will want it. And you might get enough to purchase something more to your liking.

In the mean time, enbrace it's color. Put a few accessories around the room with that blue, and it will look like everything was intentional.

Hadn't thought of that (fire hazard). We are going to have a gas insert installed. Currently it's wood burning.

Keep in mind that tile is not old. Prior owner did that within the last eight or so years.

"Paint is flammable."

Not latex paint in either the wet or dry state.

The heat might blister it off, but dried latex paint is not considered flammable.

What about stacked stone here? I think that would still be in keeping with th bungalow style.