what happened here?...and how do I clean it up?

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Well my chimney clay tile was just like yours and my wood was dry and I went through the steps and rebuilt my stove from the ground up and the problem only got worse like you pictured except mine never leaked out quite that much creosote.

Here is what I found accepted and changed. My chimney looked like that tar stuff all over it like you pictured and in denial I kept burning it like that and even went to the extent of making sure I had a continuos hot fire and I would still get creosote leaking from my chimney until the day I had a chimney fire. After that the liner was clean as can be and then I could see in the thimble area that I had cracks in my clay liner and could only imagine it was far worse further up the chimney it went. House is 25 years old.

So I ditched the old stove on Ebay and put a 5.5" flex liner down the existing liner and installed a EPA Soapstone stove and I have never had a hint of a drip or sizzle since. Not even a clink from the stove pipe or liner.

So me thinks you have exposed a two fold problem which you know the wood was on the wet side and there really could be far more worse things going on with the liner that you just cannot see. NO matter what I did with the smoke dragon I had drips to the point I wired a can up to catch it while burning hoping it would some how cure itself which it never did.

Cracks in the liner can let the cold air into the chimney and creosote forms almost immediately.

Get the chimney throughly inspected for cracks. I have burnt some questionable wet wood in the new stove and nary a problem and last year I ran the stove 24/7 and only swept the chimney after it was shut down and only brushed 3/4 gallon of fine soot out of a 24 liner uninsulated.

You might have a larger problem than you realize.
 
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