That sounds more like it. I didn't think 8x8 would be used on an open fireplace. If the chimney is really clean (including the smoke shelf), then yes, it sounds like you are good to go with an insulated 8" liner. That wood doesn't look too bad either. Your dad's friend did you well if this is typical of the splits in the pile.
Have to ask, how did this go from 25' to 15'. It sounds like you lost a story's worth of chimney.
Have to ask, how did this go from 25' to 15'. It sounds like you lost a story's worth of chimney.