I agree with you; that sounds very expensive. I can check into electric heaters also. Those are supposed to be cheaper in cost and installation. One problem with moving is that eventually if/when we want to sell the house, you probably have to fix something like that anyway before selling it or a broken heater would turn off most people buying a house.
That might be a good idea about you living in the house, if I have to rent then you living in the house if I don't have enough money. I do think one of us should live in the house for a while at least until the market is better because I think it would either not sell or at a loss with current low house prices (once you figure in closing costs and realtor commissions and stuff) like we need more debts!!! And I'm sure the kids would love you living in the same town!!! I would like to try to live in the house with the kids if possible for the sake of consistency though.