Thinking for months! Two different screen placement options!

I've been thinking about installing a projector and screen in my family room for months. Due to my room setup, I have two options for screen placement, each of which has pros and cons. I've tried to document all of my expected costs, budget and decision criteria. I need help!

I'm looking to spend less than $2000 including electrical and wiring. I most likely will get the Epson 8350 and 100" screen (around $1600 w/ tax and shipping, unless I can find a bargain Best Buy open box). I do have ambient light to deal with so I think this is the best choice. I can probably install the projector as close to the screen as possible to avoid losing lumens if it's farther away. Electrical costs will probably be around $200 to mount the projector, screen and pull the cables. I have small Infinity Infinitesimal IV speakers which work great for my front surrounds. Each new pull costs around $100.

Most importantly, the WAF is a huge variable. She would rather me pay a little more to get something that blends into the room. (She can watch standard def with TV audio and be happy. But she accepts that this is inevitable because I absolutely love this stuff.) While Option#1 is the easiest and least costly, I think Option#2 will be a better long-term choice. However, as you'll see, Option#2 has some really interesting challenges which I need help on.

Option#1: Place my screen in front of my entertainment center

Here's the existing entertainment center:


Pros:

• My 5.1 speakers are already positioned for this setup.
• Six spots on my couch can be used to watch movies.
• Seating distance is fine. The closest seat is 11 feet from the screen.
• Minimal cost to put in the system
• Least expensive

Cons:

• Biggest concern: The screen will be about 34" from the wall as that's the depth of the entertainment center at the furthest point out. Plus, the 100” screen is 93” wide and the entertainment center is only 88” wide (not including the angled side display areas). I'm worried it will look really silly being out that far once it's actually installed. Also, the kids may run into the screen if they aren't thinking when entering the room (which is common). Fix: None.
• My center speaker, currently above the TV, needs to be moved to a lower cabinet (and I don't want to pay extra for an acoustically transparent screen). Fix: I can fix this myself by taking one of the cabinet doors and replacing the center with speaker cloth.
• The doors on my entertainment center open from the inside and won't be easily accessible with the screen down (happily, my wife thought of that one!) Fix: I can fix this by just switching the doors and connect the hinges on the inside instead of the outside so the doors open from the outside.

Additional Costs:

• None

Option#2: Mount the screen in front of my fireplace and mantle

Here's a picture of the wall with the fireplace and mantle (it's to the left of the entertainment center):


Here's the seating area and view of the existing in-wall surround speakers:


Pros:

• HIGH WAF factor! Out of the way location that you don't notice in our family room.
• Larger area for a bigger screen as it's 118” wide. I'm fine blocking the left door, but not the right one.
• Projector would be near that back wall behind the fan so it's not as noticeable (hence needing the 8350 for the lens shift)

Cons:

• No front speakers installed yet. Fix: I actually have speakers (two other Infinitesimal IVs) in the living room installed right on the other side of where I need these installed. It wouldn't be that hard to relocate them to this side. I just need to figure out if I'll mount them on the ceiling and point them towards the listener or mount them somehow at listener level (would look a little funny).
• No center speaker installed. Challenge: This is my big dilemma. Do I find a center speaker, mount it to the ceiling and point it towards the listeners? Do I use my existing Energy center speaker?How about the mount? I could get an acoustically transparent screen and just put my center speaker on my mantel, but really don't want to spend the money.
• Surrounds aren't installed for this arrangement. Challenge: If you look at the picture of my listening area, I could make my left speaker my rear center channel (above the back part of the couch) and install a new left surround making it 6.1. My Rotel RSX1056 has this available.
• I would have to figure out how to change between my 5.1 and 6.1 surround setup based on what TV/projector I'm looking at. Challenge: I may just keep a 3.1 setup without surrounds for my TV with an old surround receiver and use my Rotel AVR for the projector. Or maybe there's a speaker switch available on the market that I could find.
• The couch really only fits 3-4 people when facing the screen this way. Fix: I can move the big chair across the room to make another seat if necessary.

Additional Costs:

• Lots of additional costs for speaker arrangements, but maybe worth the money.

So, that's my dilemma. I'm looking forward to some good advice from the experts!

I've thought about this a bunch, and also increased my budget a bit. I've decided to go with.......Option#2! It's really the best place to put the screen and I'm not worried about the ambient light with my Epson 8350. The blinds actually eliminate a good amount of light and the sun doesn't even directly come into that room.

Here's what I'm going to do:

1. Type of Screen: I was going to but an acoustically transparent screen but none of the less expensive options (e.g. Elite Spectrum) have a white case. The wife has rejected any component being a black case on a white ceiling. So, I ended up buying the Favi 100" from Amazon.
2. Speaker placement and center speaker choice: I purchased a DefTech ProCenter 1000 center speaker and will mount it to the ceiling in front of my screen case. I almost purchased the DefTech UIW RCS III but didn't want to install in-ceiling if it's not needed. The ProCenter 1000 got fantastic reviews on Amazon as well. Also, I've decided to learn how to install in-wall speaker wire. It will be fun to learn this skill and I'll probably save another $300-$400 or so. (While I'm at it, I'll move my sub to a different place in the room!)
3. Existing Surrounds: I'll keep the existing surround speaker placement. Since I'm learning how to install in-wall speaker wire I can pre-wire for the rear-right speaker when I do all this and purchase all new rears at a later time if I really need it.
4. Which surround amp should I use? I'm going to use my good Rotel receiver for my projection screen. I have an older Sony ES receiver which will easily work as a second receiver for my main TV with three speakers. I probably don't even need a sub since I won't be watching movies on the small screen. Any fun movies or TV shows (like Homeland) will be watched on the big screen.

Am I missing anything?