Well, stainless steel is going to cost a whole lot more than the double wall I usually use, mine is galvanized and accepted by all code functionaries in my state for its use. Those that bother to get out of the car and do their inspection that is.
Of those that actually do an inspection, my double wall pipe installation has always been spot on and less costly than either $265 or $800, YIKES!!
I feel for you there Toepopper, I do have episodes similar to yours from time to time with much the same outcome, more money from the contractor then more money from the customer. Gotta love that cycle of life, NOT!!

Code or no code they charge way too much money for the double wall chimney pipe. When you look at it there is nothing there. I just bought a roof mount kit, 2 pieces of exterior metalbestos double wall chimney pipe, (stainless steel), a S.S. chimney cap, a telescoping internal double wall Dura vent hook up pipe, a stainless steel close clearance connector and a 24" piece of double wall pipe and it cost me $800. YOUCH!!! That one hurt and I could feel it all the way home. There are only 2 places to get these items locally so they match their prices and gouge you big time. However, should you have a chimney fire or if your house burns down, the insurance company WILL NOT PAY if their investigators find some chimney components that are not up to code. If you live in Kowleefornia and your house burns down due to non code components you also get to pay for the firefighting expenses. They got you between a rock and a hard place.

OK, code is what caused the higher price than I am accustomed to seeing. Here, we are required by code to sue B-1 MetalVent or an approved equivalent for venting any fire using heating device. B-1 is a double wall pipe used everywhere I've been around here with a reasonable penetration gap, 'bout an inch or so. Roof and wall penetrations can have zero clearance, best I know, but must have either a thimble in and out for the wall or appropriate flashing through the roof. The zero clearance is from the outside of the pipe having little to no heat, it's all on the inside as the air gap is good insulation between the pipe walls.
If we vent through a chimney, it must be either non porous ceramic lined or a steel or high temp aluminum flex tube liner with a spark arrestor at the top.

It can only burn wood with stove turned off and if it is vented like a standard wood stove with a natural draft. Wood pellets are about ¼ inch diameter and about an inch long. Kind of like rabbit feed. They are fed into what is called a burn pot via an auger system. The end of the auger has an open cup on one side so as it rotates a small amount of pellets fall into it and it is delivered to the fire by the auger. They are round so they flow easily, it’s all gravity fed, wood chips or discs would jam up the auger.

The vent pipe is triple wall zero clearance installed to code. If I didn’t do this and the house burned down I would be out of luck. The vent pipe runs for about 2 feet along the wall and is 1 1/2 inches from the wall, I can put my hand on it after the stove is running and it is just warm. The end cap has a spark arrestor, and the wall thimble has a one-inch clearance for the pipe so there is an air gap between the pipe and the wall thimble. It was a lot of money, I looked around but that was code. BTUs per dollar the pellet stove are one of the most efficient.

I'm curious about something here. Since your pellet stove can burn wood pieces if pellets are not available, can you do something like running tree limbs through a chop saw cutting small disks of wood to use as a fuel source? Having no experience with a pellet stove I don't know the size of the pellets so I don't know how small they need to be to feed through the hopper.
Also, your ventpipe for the exhaust system, what is it made from? I can purchase steel pipe and fittings for a lot less than $265.00 for quite a number of feet, B-1 MetalVent even. Or is the price so high because of availablility or demand? Sorry, it just seems to me that $265.00 is way to much to pay for stovepipe knowing what i know.

We have already started to use our pellet stove, not every day but this is about three weeks earlier than last year. I put in a pellet stove a couple of years ago when heating oil prices were $4.00 a gal, our other heat source. I found a used cast iron (super heavy) Earth Stove for $250.00 it was dirty and needed to have one of the small glass side windows sealed but other than that it worked fine. I got some leftover floor tile from a friend and tiled the corner of my living room to install the stove. To save some money I vented it horizontally instead of vertically through the roof it was still $265.00 for the vent pipe, one elbow, the wall thimble, and the end cap more than the cost of the stove but well worth it. It’s one of the only pellet stoves I’m told that you can burn wood in if you have a natural vertical draft, which I don’t, but that would be nice if the power goes out.

As far as pellet go I thought all pellets were the same so I bought the cheapest ones I could get which were Burns Best at Home Depot about $225.00 a ton, one pallet, 50 bags, 40 lbs per bag. Then the end of last year I ran out but only one place still had pellets in April, the feed store I go to so I bought 5 bags, I burn about a half a bag a day or 20 lbs. They were about $0.85 a bag more for a brand called Bear Mountain I thought it was because they were the only ones in town that had pellets so I figured they were charging more. On the bag it read, “ burns hotter, cleaner, longer”, well they did! One thing I noticed was when pouring the pellets into the hopper there was no dust were the Burns Best pellets would create a cloud of dust. So some pellets are made with more hardwood than others. The feed store just had them on sale a while back and we bought a pallet of the Bear Mountain they were $25.00 more for a pallet but well worth it.

If you install a pellet stove and have a choice of pellets buy one bag of each put half a bag in the hopper and leave the stove on one setting and time it on how long it takes to burn the 20 lbs then you can decide which pellets work best for you.