Absalom

There is actually high-temp mortar for use in fireplaces that can withstand very high temperatures. Theoretically, the perlight is there so after the initial burn in, it burn off leaving small air pockets that compensate for expansion. Mortar already has sand in it so you wouldn't have to add any more if at all. I would guess 1 part pearlite/6 part high temp mortar/1 part sand. If high temp mortar isn't available (you can order from home Depot or usually get from a tractor/farm supply), I would use white thinset (like you use for laying floor tile or floor/wall tile in showers) way before I used cement. It has a lot better resistance to moisture, whereas cement just drinks it up, which probably contributes to it's cracking when mixed with clay and sand. The glassy soft wall the one gentleman mentioned is likely from adding too much pearlite and sand, which when heated in a kiln or blast furnace turns to a glass/ melted plastic like substance. Like I said, easy on the pearlite.