This is a really awkward space! What about trying to build a unit into the corner which seems to be dead space. This could house the television and other bits like dvr,amp etc. The unit could then extend out towards the door in length and in height either up to the start of the window or up to the start of the blinds. I would suggest drawers for toy storage and books above. In this way you leave the windows clear for light plus it looks like you have a pull down screen so the tv would be out of the way of that. This arrangement would also hide all those wires and cables! Ikea have some good examples of storage which you could adapt or copy, such as Besta which illustrates the extended toy storage. http://www.ikea.com/gb/en/catalog/products/S39927155/

Deep gray and all the other accents in silvery old wood and cream. This will add drama, allow the other elements to bring ion light and set off the concrete wall as a true feature. If you want light instead of drama, then go for a very pale beige stone. It will echo stone colours in both the concrete and rocks...

Joanna Gains style is fun! What you choose for lighting and surfaces will determine the amount of reflective light in your stairway. The Architect is right in what he is suggesting "a decorative wall" could bring more light into the space. I believe you could apply this on principle....for example you could do a feature "Architectural Mirror"or lots of mirrors on the wall in the right position to reflect light in "Joanna Gain style" then in the same style add an eye catching pendant or wall lights depending on what is best functionally. Remember what you use on the ceiling & walls is important too every surface counts for your situation. Try a satin finish with a cool white like Dulux "St Clair Quarter" or Resene "Black White" Maybe Nancy's suggestions of a skylight is an option for your situation if it allows ? Natural Light is always great. Heres some inspiration...All the best!

There is a lot of paste and size residue still on the walls. Washing and scraping helps but it still feels like it's there. Would a good sanding be sufficent or do I need to wash all the paste off before painting?