I've seen many chimneys throughout New England covered with siding. You should be fine with 3/4 inch pine strapping in the corners. Attach the wood with tapcon screws into the block every two or three feet. The tapcons will not be prone to cracking the block or blowing out a chunk like a powder actuated fastener would. All you would need to drill is a lght weight hammerdrill, cheap to rent for a day at local rental place. Once this strapping is installed, any kind of siding could be used, vinyl, wood, cement. The top can be closed off with aluminum flashing, or just smear on a liberal coating of silicone caulking.