My mother sold her 9 year old townhouse and during the home inspection, the inspectors CO detector recorded excessive amounts of CO2 emissions when testing the fireplace. We hired a "fireplace expert" for $175 to advise repairs only to be told that the whole inside of the fireplace will need to be replaced at a cost of $750.00. Does this sound correct? And what guarantee do we have that the NEW fireplace will not have the same issue when re-tested?

Does this sound correct? And what guarantee do we have that the NEW fireplace will not have the same issue when re-tested?

Costs are a local pricing structure and not set on a national level. I suggest you get more than one estimate since trying to confirm a price here would only be a wild guess.

Hinge your payment for repairs on the facts. If the person wants to charge you 750.00 to do the repair that is fine BUT you owe them nothing if it will not pass the CO inspection.
Have this statement written into your legal and binding contract and that way you are guaranteed that it will pass or you are not out of pocket for the 750.00.

If the fireplace repair person does not want to go along with this idea then he has no faith in what he told you to start with and I would seek other imput from a different company.

175.00 just to look at the fireplace seems high no matter where you are located but that is just my opinion. Gas logs can be adjusted to create less CO with the proper tools. Did you see the reading on the scale of the CO meter? Is the inspector being strait forward or did he recommend the fireplace repair person? If he recommended the fireplace repair person this could be a scam. You never know.