My hot water oil furnace has been giving off really obnoxious fumes for 8 years. It's something I've had to learn to live with (coughing, watery eyes, etc) because my oil company can't find the cause. As the fumes aren't positive for CO, it's never been a big emergency to them.

The company that's been servicing the furnace and supplying oil is the same company that installed it new in October of 1997. The old one was one of those huge old iron ones from the early 1900's, and they didn't remove it, so they had to install all new water pipes to the new one.

When the fumes first began in 2001, they first told me I needed a chimney liner. So, $2500 later, when that made no difference, they told me that moisture was somehow getting into the furnace and creating massive amounts of scale, and that might be the problem. But no one could find the source of the moisture. I was put on 'special' service contract, where I paid an extra $100 per year to have a scaling/cleaning done every year instead of every 3 years.

This past year I did a great deal of traveling for work so wasn't ever around long enough to having a servicing done. It's now been well over a year since the last one.
Last week I went down into the basement and almost had a canary when I looked at the furnace. There's a water valve located directly above the furnace, and it was dripping - badly - directly down into the furnace. The valve is on the water pipe that comes out of the top of the furnace and extends out to the pipes upstairs. It had been dripping so long that it had burned a big hole in the flue pipe coming out of the top of the furnace.

My question is this: does it make any sense whatsoever to install a valve in a water pipe directly above the furnace? There was plenty of space elsewhere on the pipe that the valve could have been installed so if it did ever drip it would drip onto the floor. Is this improper installation? Could this be the reason for all the fumes?