That is a terribly inefficient design Theo. Particularly the heat exchanger. 90% of the heat from the fire will be lost without heating the heat exchanger. Heat exchangers work best when there are many small pipes. You want to increase the heating surface area so about 1" pipes would be somewhere around optimal in my opinion because you need to push air through them. If you were heating water then smaller yet would be better.
What would be a much better design would be to surround the heater with a plenum chamber. Cold air in from the shop at the bottom and hot air to the shop from the top. And insulate the chamber to minimize heat lost to the outside. You could also build an insulated shed around the heater. Like John said, you'd have to watch about adding sawdust.
Someone I consider a master woodworker once told me that a master woodworker is not someone who never makes mistakes. He is someone who is able to cover them up so that no one can tell.