The
99% outside design temp for Newburgh is +10F. (Poughkeepsie's is +6F, a bit up the river and further from the coast than you.) It gets colder than that, but 99% of the time it's 10F or warmer.
Say you used 3 x 275 gallons = 825 gallons since last August.
Using data from the airport's weather station on
degreedays.net, during that period Newburgh experienced about 6522 heating degree days (base 65F.)
So that's 825 gallons/6522 HDD= 0.1265 gallons per HDD.
At 138,000 BTU/gallon that's 138,000 x 0.1265= 17,457 BTU/HDD of source-fuel.
At 85% combustion efficiency that means 0.85 x 17,457 = 14,838 BTU/HDD went into the heating system (the rest went up the flue.)
With 24 hours in a day that's 14,838 /24= 618 BTU per degree-hour.
Your outside design temp is +10F, and the presumptive heating/cooling balance point base is 65F, which means you have 65F-10F= 55F heating degrees.
Which implies a heat load of 618 BTU per degree-hour x 55F heating degrees= 33,990 BTU/hr. Call it 34K.
If you were turning the thermostat down to 55-60F every night or while you at work it might be better to use base 60F. Degreedays.net comes up with 5310 HDD, which would result in a constant of 759 BTU/degree-hour, but only 50 heating degrees, for an implied load of ~38K, but that's still at loooong way from needing the output of the AWR070.
As a rule-of-thumb sanity check, 34,oooBTU/hr for 1100' of conditioned space is 31 BTU/hr per square foot, and 38K/1100' is 35 BTU/ft^2, either of which is a bit on the high side even for an uninsulated house, which implies a lot of air leakage in that balloon framing.
With the Peerless jetted for 90K-in it's not really delivering 85% efficiency, since it's about 2.5-3x oversized for the actual load,. with lots of idling and cycling losses. The real load is going to be bit smaller than that, but it's over 25K-it might be over 29K, but not by much.
With vinyl or aluminum siding the siding is back-ventilated, which makes it safe to install blown cellulose or fiberglass in the balloon framing without running into moisture issues, and it should be possible to install it by drilling from the exterior. Some may be installable from the attic or basement without drilling, but around window & door framing they'd be able to pop off and re-install the vinyl siding without a problem. Aluminum siding might be more difficult to deal with, depending on the exact design, but worst-case you may have to install some from the interior and patch the plaster.
If there is flashing in the window framing it's fine to use cellulose everywhere, but if there isn't it's a bit of a judgement call on just how much roof overhang there is to protect from bulk-water intrusion at the windows. In some ways fiberglass is better, since it dries more quickly from those events. With open stud bays and big air leaks there's quite a bit of drying capacity, but when you install the insulation the exterior wood stays colder (= wetter), and the drying rates slow down substantially. But 95 times out of 100 it's fine to install cellulose, which is generally cheaper than fiberglass.
Air sealing the foundation sill to the foundation with can-foam or closed cell spray polyurethane helps the air infiltration problem a lot, and filling the stud bays with insulation blocks those bays from behaving as basement-to-attic flues driving infiltration. There may be plumbing/flue/electrical chases that need to be air sealed both top & bottom too. Poured foundation walls can be insulated with 2" of closed cell foam (expensive, but quick, not-so green) or with 2-3" of rigid insulation (foil faced polyiso is the greenest, XPS is the worst), or an inch of polyiso or EPS trapped to the foundation with a 2x4 studwall insulated with unfaced or kraft faced (but not foil-faced) batts. Depending on how much above-grade foundation there is, the foundation losses could be as much as a third (and almost always more than 10%) of the total heat load, even if you're not actively heating the basement.
If you air seal and insulate the walls, your total heat load will come down to something between 15- 20,000 BTU/hr, which means you would have huge margin, even with the smallest of those boilers. And the warmer exterior-wall temps would raise the average interior radiation temperatures, making it more comfortable at ANY air temperature.
I'm pretty sure
NYSERDA still has pretty good subsidies for weatherization & insulation upgrades- I haven't surfed their site regularly enough to know the details, but it can be surprisingly cheap to air seal and insulate the framed walls of a house that size. If they won't spring for foundation insulation, using used-once reclaimed or
factory-seconds roofing foam you can DIY it for cheaper than 1" virgin-stock foam + 2x4 & batts from box stores. IRC 2012 code-min for your location (US climate zone ) would be R15 continuous foam, or R5 foam + R13 batt studwall (or R19s in 2x6 studs but that's a mold hazard), but even R8 or R10 would be a huge improvement over the ~R1 naked poured concrete foundation. If you end up doing the basement as a DIY, check back for details on how to do that without creating a mold hazard.
Even if you do the weatherization in stages, it seems highly likely that you'd get within range of the 29-32K output boilers pretty quickly. If there is knob & tube wiring in the place it could become an issue for the insulators, so get that checked out. But it would be silly to install a 70K-90K boiler just to cover the "before insulation upgrades" picture, when a 29K output boiler would cover the load down to -20F or colder at the "after" picture. If you oversize the boiler for the space heating load it will only run less efficiently than the smaller more appropriately sized boiler.