Routing the vent higher to dissipate more sounds potentially dangerous. Tankless hot water heaters & condensing boilers have well-defined limits on vent length not to be exceeded.
The fact that there is unburned gas in the flue purges in quantities sufficient to smell in open air is suspicious at best, and possibly a disaster waiting to happen. In a longer vent pipe it may end up diluting to an explosive mixture, just waiting for an ignition source. Any unburnt released gas needs to be diluted beyond explosive levels ASAP, not hanging around in long flues until the flame front reaches the rapid-burn zone.
DO have the gas company give it a well-instrumented sniff. It's possible that the amounts are small and the hazard low, but until it's actually tested by a disinterested third-party I'd remain concerned.