My home is approximately 40 years old.  Before I purchased the home (15 years ago) the previous owners had the chimney (3/4 exterior) resurfaced using 2X4s, insulation, and T111 siding. Since I have not seen the exterior of the chimney I believe this was done because the bricks where coming lose.  Anyway, now the siding is starting to rot and needs to be replaced.  After doing some basic research I have found that insulation should not be used around the chimney as that limits airflow.  Also, the orginial builders attached the studs directly to the brick.  This I have found out is another no-no.  Any advice on what to do with this repair would be greatly appreciated.  Thanks in advance, Bill