On replacing the pipe, I found that the damper had a 3/4" knockout apparently for this purpose. I've removed it, and we'll see what happens in the coming winter. This amounts of a tiny air leak, but with a 20 foot stack effect should help to keep the exhaust system dry. Since the house is an older one, built in the mid 80's, and we heat with wood a lot, this is an inconsequential air leak.
The pipe was inexpensive -- four 3 foot sections, two adjustable corners, and a T ran me $80. Replacement was straight forward, with the usual minor problems of working with sheet metal. An extra pair of hands holding one end is useful. I used 26 ga pipe this time. This is heavier, I think, than the last time I replaced it.
Guys at the Heating and gas company say that this is a common problem in our climate especially with medium efficiency units vented through older stacks. The units with their higher efficiency produce some NOx gasses which combine with water vapour to produce acid that chews on the pipe. Anyway the guy claimed that the vent pipes are good for only about 15-20 years.
One comment suggested swapping the unit for a smaller one. While this is doable, it would cost thousands of dollars. We do a lot of heating with wood, and keep unused parts of the house cold. The house is well designed for winter solar gain. On a sunny day even at temps of -20 C (roughly 0F) we build a morning fire, let it go out, and build another when the sun goes over the hill in late afternoon. The unit is properly sized for worst weather scenarios, and no auxiliary heat.
At present the indirect hot water tank is used as a buffer. This increased the cycle time from 2 minutes on/15 off to a cycle about 2.5 times as long during cold weather. This decreased but did not eliminate condensation in the stack.
A better solution to this would be a variable fire water heater where the blower and gas mixture are adjusted according to need. W. O. Stone makes a series of units that have a 4:1 fire range. E.g. It fires at 25% of full when the water temp falls below 140, increases to 50% if after two minutes the temp falls below 137, increases to 75% if it falls below 135, and increases to 100% if it falls below 132
- adding an additional buffer tank. Space makes this difficult.
- adding an on-demand 20,000 BTU water heater. These are usually not designed as water reheaters, and a supply of not quite hot enough water may result in boiling in the heater.