Adwilk, see photo below. The frame comes out about the same distance as the short wall to the right - 2 feet. The new fireplace will be gas and will sit in front of the old one at the same height. TV will be mounted above this. You can see all the speaker, coax, and electrical wiring in the box to the right near the floor. The framed area will have a stone veneer, and we will build "built in" cabinets between the new veneered "chimney" and that short wall to the right. Ditto for the left side. The ceiling is 9' high.
The idea is to have 5 ceiling mounted directional speakers (1 center channel), probably from SpeakerCraft (AIM7, 3). Then I would put the receiver, BlueRay, Verizon TV box and subwoofer in the cabinet to the right.
The cabinet maker also did our kitchen cabinets and dining room table, and he can easily build whatever we need to make a subwoofer work in this situation. I can't go with anything floor mounted as highfigh suggested. Actually the new flooring will be finished tomorrow! The Boss wants wood cabinet doors, not speaker cloth or glass. We probably will stop the cabinets at 6 feet high or so, so if the sub output can go "up" through the top, then I could probably do that.
As far as an earth shattering infinite baffle, well, this is the audiophyte forum. I don't know what that is, but I want one.
OK, so I appreciate the replies so far and am looking forward to figuring this puzzle out. Then I can move on to picking the right receiver... but that's another thread.
Bushka