I want to replace my existing thermostat with a new one which requires a C wire. Unfortunately I don't see a wiring diagram anywhere.
I see that I have a 2 wire setup with the red being connected to the transformer.
Where do I connect the unused blue C wire?
The transformer terminal with the black wire coming off of it (the top terminal in your picture) is where your C wire needs to connect at. We know this because in order for the furnace to work, power from the R wire on the bottom terminal needs to be returned back to the C terminal on the transformer via the gas valve.
Oh, and while you're in there, please put a wirenut on the splice between the black wire from the limit switch and the white wire from the thermostat cable. The current splice looks like it could turn into an intermittent "no heat" at any moment...
