Hi, guys. I'm looking for a sanity check on a complete replacement of a 40-year-old HVAC system that still works, but which has developed a leak somewhere that's oozing through the concrete and into my carpet.

I've already asked about simply replacing the drain pan and coil in the air handler that's leaking, and got The Look from the AC guy. In part, that was because the air handler was installed in way that makes the coil impossible to get at without ripping open the walls. In part, it was because the whole system is so old that it's all gonna go soon anyway.

So, do I want to go to the opposite extreme them and replace EVERYTHING? That would be a heat pump, air handler, new coolant lines, new ductwork with proper insulation, and a whole house air filter. (I live near a freeway, which generates dust and sooty particulates.) There would be asbestos abatement involved. Did I leave anything out?

This would be for a 913 sq ft condo, 2 bedrooms, single story, with concrete slab foundation, a poorly insulated attic above, and HUGE windows. I've got corner windows in the living room -- one 8 ft wide by 5 ft high and the other 6 ft wide by 5 ft high, facing south and west. The master bedroom has a window 8 ft wide by 4 feet high facing west. In Southern California. Single-pane glazing.

The complicating factor with buying anything new is that the existing closet for the air handler is three feet wide but only 14 inches deep. I'm told there's a First Company air handler that will ALMOST fit -- I just need to have a handyman open up the front of the closet space and reframe it to project out into the hallway about 1 inch further. That's not acceptable to me, though, because the hallway will then be too narrow for a wheelchair. I asked about tearing open the BACK of the closet, which opens into another closet rather than the hall, but the AC guy I talked to said that wouldn't work. The First unit has to be positioned a certain way over the existing condensation drain line, and that line enters the concrete too far forward for the air handler to be moved back.

Now, I don't trust that condensation line anyway. We couldn't rule it out as the source of the leak that's oozing into my carpet. It's not blocked, but it's only draining a tiny trickle of water outside, not the foot-wide puddle it used to generate last summer. I'm thinking that puddle is now in my carpet. And if that's true, I don't want to use the existing drain line, no matter what.

So now my thought is, let's move the air handler. My current linen closet sits above one of those squat water heaters. Could I use the overflow drain for the water heater to double as a condensation drain for the air handler above it? The linen closet space above the water heater measures 56 inches high by 26 inches wide by 33 inches deep. It's located across the hall and 3 feet to the right of the current air handler closet location. Is that enough space for an air handler? Could I also get a whole house air filter in that space? And what about the air intake? If the intake was from the bottom of the air handler, the air would have to pass over the water heater and come through the lower closet door -- which is only 24 inches wide. If the intake was from the front of the air handler, the visible vent would still have to come through a space that's only 24 inches wide, and it would be located halfway up the wall. Would that meet Uniform Building Code standards?

Finally, I'm thinking American Standard or Bryant because Consumer Reports rates both of those brands highly for heat pump reliability. I want an Energy Star rated system, so I can possibly break even on the replacement expense over ten years. And I want matched components from the same vendor, because I read somewhere that matters. (We're talking fluid mechanics here when we're dealing with airflow -- complicated. Tricky. Unforeseen side effects. Chaos theory. I buy all that. ) So that would mean finding an air handler from one of these companies that fits in the linen closet space above the water heater, and would fit WITH a whole house air filter added on.

Is this possible? More importantly, is this sane?

Or should I have the HOA tear out my interior walls where the condensation line runs (including the closet containing my air handler), chip out the concrete, and replace the condensation line?

Inquiring minds are confused ... help?