There are quite a few things to say. First of all, it is odd to use your best speakers for surround instead of up front. I understand the idea of voice matching the center to the front speakers, but I would switch the front and rear speakers.
Second, what did you dislike about about the setup from running Audyssey?
As for the distance to the subwoofer, you can manually correct that.
Regarding the levels you set, we have absolutely no way of knowing if you set that decently or not, and unless you used a sound level meter and test tones, you don't know if it is set right either. Most likely, Audyssey set the levels correctly.
You should probably set all of your crossover frequencies for your front, center, and surround speakers to 80 Hz. It should be set
above the -3dB point of your speakers.
In your receiver, your speakers should be set to "small" (not "large") and you should make sure your subwoofer output is set to "on".
Your subwoofer is not a very good one. Read some of the reviews of subwoofers at this site to get an idea of what is needed to shake your room well. It will cost you more than you paid for that Velodyne to get a good one. If you are going to use the one you have, put it in a corner to maximize output.
You state:
"blueray disc played on ps3 connected through A/V"
I do not know what you mean. It should be hooked up via HDMI to get the full audio benefits of Bluray.
If you can return it for a refund, return the Monster cable. It is overpriced. Read these:
http://www.roger-russell.com/wire/wire.htm
http://www.audioholics.com/education/cables/long-hdmi-cable-bench-tests