I am looking for advice: We are installing solar panels and switching from oil heat to electric heat as well as to hot water on demand LP water heater. Since the oil furnace has been removed, is it possible to vent the gas water heater vertically through the unused furnace chimney?
Yes you may route the gas water heater vent using the former furnace chimney except when the water heater instructions say otherwise. For example the water heater venting components may recapture or recycle so much of the heat from the exhaust gases that the gases will no longer rise up the chimney and a special vent pipe (diameter wise) and routing is needed.
Don't let the weatherman string you along. Stick to your lawn watering schedule until it actually starts pouring.