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/

I am planning to add scatter cushions and think if I do a pair of larger ones for each end so they go over the arms to creat height at each end, and a couple of smaller ones, I want to bring some colour in too. I do like the idea of a larger side light at either end to, Switching the sofas is going to be my final fix if all else fails!!

I would move the two chairs against the wall with the table between for a "side" seating area... which can still see the t.v. (needs some baskets or something under that table... a trunk maybe...to bulk it up). Then make an L shape with the other couch/loveseat that you have. You also have great storage along the tv wall but it's kind of bland... punch it up with a color along the back of the bookcases or a funky wallpaper. Drapes for a punch of color with some other accessories and you'll have a gorgeous room. It also looks like you have an ottoman.... put a tray on top and use it as a coffe table for a while.

I've been looking at these plans for about half a hour now and I'm stumped. What did you guys decide on doing? If things came down to it, you could remove the fireplace. But I'm guessing you don't want to do that. Let me know what you decided to do!