Absolutely get a projector. The Benq W1070 is considered the benchmark of low priced projectors. I am on my fifth projector. I've never spent more than $1000 on any of them. They keep getting better and better as the technology has improved. I bought a W1070 when it was on sale a year ago for $639 and then never opened it, but sold it on eBay and bought a used Sony Hw30es instead. I use a diy 109" screen and I am planning to make a new one at least 120" diagonal. If you are able to diy a projector screen, you can save at least $2-300. There is a sub forum for diy screens and you can find all the info you need to make one using inexpensive spandex.
Put the extra money you save on the TV into better speakers and subwoofers. Especially subwoofers, plural. You want at least 2 and preferably 4. Again, huge money can be saved if you diy. This kit at partsexpress.com is a good start: http://www.parts-express.com/dayton-...ndle--300-7099
To power it, pick up an inuke 3000dsp from northernsoundandlight.com for about $220. That will have enough power for two of those 18" subs at 880 watt each.
For reference level speakers that are tremendous bang for the buck, get 5 Mackie C200s at under $200 each delivered. You could get 7 but I've never found the rear surrounds to add much. Read post 30 in this thread to see where the C200s are compared to highly regarded speakers costing over 6 times as much: https://www.avsforum.com/forum/155-di...nder-hood.html
Any $500 receiver is fine. Just make sure to get one on sale or even a refurb.
Here's my breakdown for a low cost, blow your socks off home theater:
Receiver: any major brand mid level receiver ~$500
Speakers: 5 x Mackie C200 @ $200 each $1000
Subs: 2 x Dayton UM18-22 @ $399 each (wood glue, wire, terminal cup, extra) $798
Behringer Nu3000dsp for 880 watts per sub with crossover and EQ: $225
Projector: Benq W1070 $650
Screen: diy acoustically transparent using spandex ~$150
Optional upgrades: 2 more C200s for 7.1 $400
2 more UM18-22 subs for rear of room: $798
substitute NU6000dsp for nu3000dsp if getting 4 subs for only $100 more than nu3000dsp.
This type of setup will absolutely amaze you and your friends and family. The picture quality of even entry level projectors is fantastic when projected onto a 120" screen. The sound quality from Blu-rays with speakers capable of the full dynamic range intended along with adequate subs is stunning. You will never regret going this route.
You will also want some good black paint for the walls. See the thread https://www.avsforum.com/forum/24-dig...r-go-back.html
to see what a difference blacking out the room can make, along with many ways to accomplish that goal.