Hi BG, There is nothing wrong with using a coil in the coal boiler,, but they do cost money,, and you will have to replumb the pipes with shut-offs to keep the oil burner's coil separate,, you don't want to have the coil transfering heat into the oil boiler. Price out the coil option. It isn't available on some of the smaller boilers.. so that may be an issue. or just plumb it like I said..
The reason I suggested adding the coal boiler the way I did is that for me,, personally I hate disturbing old plumbing.. It never seems to come apart easily, I end up having more problems,, I just want to interfer with the old, functioning plumbing as little as possible.. but this may not be possible, or practical.. Since I'm not there, looking at your setup.. I'm just making general suggestions..
For the chimney,, if you use a smaller boiler,, like a Harman VF3000, or a Keystoker Kaa2, or even an AHS S130 or Axeman Anderson 130M, your chimney will be fine.. a larger Keystoker Ka6, or EFM, yes, they need the 8"... But I'm not sure you need a really big boiler.. The AHS and AA 130's are very capable units and the smaller Harman and Keystokers may be enough as well.
EDIT: I just re-read some of the earlier posts on this topic,, I see that the house is 3400 sqft, and poorly insulated,, the Kaa2 and probably the Harman VF3000 are too small...
If you are not adverse to a lot of replumbing,, you can set up your system to completely bypass the oil boiler,, just use ball valves, and divert the systems to the coal boiler,, and let the oil boiler sit,, It is better for a boiler to stay warm,, prevents corrosion. And many people want the automatic backup of the oil boiler in series with the coal.. that way they can go away for a week, and have the oil system keep the place warm with the coal system shut down.
You have lots of options and decisions.. I assume you are going to do the plumbing yourself?? If not, get a few professional plumbers in to look at it, and give you ideas and quotes.. and get your chimney inspected, just to make sure it is in good shape..
Take care,, Greg L