BillKen, you're right, there are a lot of limitations with that setup but you should optimize what you've got. Get the AVIA Guide to Home Theater and a Radio Shack SPL meter and take an hour or two to go through the setups. It's a good investment regardless of your room or system.
If you still don't like it then you can go audition better speakers but you're really limited because you can't get adequate separation between the front L and R, and the surrounds are not in a good location.
Search the forums here for more on the AVIA guide. By the way, keep the HK235, it's a fine receiver with plenty of power for your room.