Sorry for the odd non-quoted reply, but...oh well.
I can't quite agree with what MKTheater said, so let me add my comments.
"1. What does it mean by "reference levels"--loud? Reference is playing 0 MV after audyssey calibrates, yes loud."
But hardly anyone actually listens at "ref" because it's too loud for a small room. The typical loud for home sized rooms is -10 (my personal preference is -11).
"2. Do you think that the 4311ci would be enough to drive the speakers in a room that size, or do you think a separate amp would add significantly.Again, this depends on how loud you watch movies and the problem will be more of the load at 4 ohms."
There actually is an answer to this, and it's not based on the impedance of the speaker, or how loud you listen, but rather its efficiency or sensitivity. This is simply the Sound Pressure Level you get for a given power input to the speaker, at a standardized distance from it. The usual is 1 watt at 1 meter, and the number given is in SPL. MK Sound doesn't publish the efficiency (sensitivity) figures for the current S-150 MK II, and you didn't say if you had the original or the current ones, but there's no reason to expect much difference. In fact, checking a manual for the original S-150 won't get you the figure either, but we can do two things to extrapolate it. First, looking at it's cousin, the SW-150 (in-wall version of the S-150) we find the efficiency to be about 89dB (it's actually specified differently, but we can convert to the standard). You can back into the SPL you'd have at distance other than 1 meter. You basically drop 6dB every time you double the distance. If we assume your front row seats are 10' from a speaker, 1 watt would produce just over 79dB SPL. That's above the level of normal spoken conversation, and we're only at 1 watt and 1 speaker. Without boring you with the details, the 4311ci output max at 140 watts into 3 speakers (LCR) would produce a maximum SPL of just over 105dB. That's above the THX Ultra 2 spec.
Speaking of THX, the fact that the S-150 is THX Ultra 2 means it's been designed to produce more than the THX reference level, by 20dB or so, with an amplifier of around 140 watts in a room of 3000 cu ft at a distance of 12', and as you can see, they will do that with your 4311. You could have looked at the THX Ultra 2 badge and just assumed they'd be fine in your 2550 cu ft room.
"3. I'm not huge on bass, but I do appreciate a clean, non-thumpy sound. I can get two v-125's for $500 used. I can spend about $1k and get a used 350. Or do you have another suggestion? For $1000, I would rather find a used SS 18.2 or Epik Empires"
Let me go back to my earlier statement that 2 modest subs are better than 1 huge one and explain why. It's not about volume, it's about getting even bass response in every seat. You simply cannot do that with a single subwoofer because of room modes. I'll forgo the deep tech here, but every room has them, you can't get rid of them, and they result in really non-flat bass response with huge peaks at some frequencies, and huge nulls in others. If your seat happens to be in a huge bass null, there's not enough power in any sub to overcome it. You deal with them by using more than one sub, each in a different location. Each one excites different modes, and the end result is where there's a dip in response caused by one sub in one location, the second sub fills it in. 2 is good, 3 better, 4 great. You have to use an additional sub in a different location. Given the choice and budget, I stay with using 2 less expensive subs rather than 1 big one. That said, there's a lot of inexpensive but great subs out there. Check out the HSU line, for example. Their subs knock the pants off most others in double their price range. http://www.hsuresearch.com/subwoofers.html
I'd consider a couple of VTF-1s or VTF-2s if you can squeak out a few more bucks.
"4. Any recs for surround speakers? I'm using a B&W 705 currently.Timbre matching is best, find some M&K SS-150's, SS-500's, S-80's, or S-85's. S-150's would be best"
Tambre is the general tonal quality of a speaker. Tambre matching is a concept first introduced by THX in their first home theater specs. It makes sure that surround speakers match the character of the fronts. This means that sound moving from any front to any surround maintains its character, and the movement is seamless. If you don't use tambre matched surrounds, when sounds move from front to surround, or vise-versa, they will change character witch spoils the suspension of disbelief. Go with the SS-150's if you can, they're the best match to the S-150 fronts. I don't support using S-150's all around for a 5.1 system, but would for higher channel count systems. The PSB probably won't match well, but are still fine surround speakers. There is a point to having THX surrounds, especially in a 5.1 system. They are better at producing a diffused sound field, and have flat power bandwidth over their entire coverage, which you especially want with only two surround speakers in a home-sized room.