This old wall gas heater, about 60's, is depositing a plume of gray on the wall and onto the ceiling above the unit. The service man has already told me that they is nothing that can be done about the soot/discoloration on the walls in the room. He assures me that the gas heater is working correctly. I do not believe that I have to accept this soot in my house. I still think that there is something wrong with the heater or installation. Please advise me on how to get rid of the gray plume?

I think that the pilot and burner of you furnace need to be adjusted so that when they are burning you have a nice blue flame. If they are burning with yellow tips it is not right and if you clean then out with air of maybe even a vacuum it will help.

As for the discoloration on the wall and ceiling you will probably have to cover the paint with a product called Killz it will cover the dirty look and keep it from coming back through the new paint that you need to put on.