AH HA !! the plot thickens..
those US stove products are such a battle to try to burn coal in... I should have put a wager in my last post that it was a wood/coal combo stove by US Stoves.. You are not alone with your losing battle with a US stove product..
OK, do you remember what the draft was in the chimney with the 'HotBlast' furnace?? I mean did the installer ever put a Manometer in the pipe and get a number for the draft??
Here's the way I see your situation, you will really like the Mark II's heat and radiant heat in the living room, and it will do a fine job keeping the main floor warm. BUT if you use the basement a lot, and that is where you want to be comfortable, then I would still try the Harman Mark II in the basement... The MarkII will burn coal very well hooked to a chimney where the 'hotblast' furnace would struggle to burn at all.
A Harman Mark II is a very fine quality COAL-burning appliance, not a combo wood/coal appliance with a compromised firebox design. If you have a nice place to put a free-standing stove, and hook it to the chimney flue with a Baro-damper, then you should have a GOOD experience with the Harman in the basement.
If you spend most of your time on the main floor, and can tollerate a cooler basement, then your plan to install the MarkII in the fireplace will do the job...
Make sure that the chimney flue pipe from the Mark II is SEALED at the base of the fireplace chimney, don't let ANY air leaks exist to pull air from the room around the fireplace damper/flue pipe connection. I hope you are setting the MarkII out in the room in front of the fireplace. If you set the MarkII inside the fireplace opening, you will lose a lot of radiant heat off the stove-body, this radiant will just keep the bricks in the fireplace warm, instead of you and your living room.
Hope the above helps...