I also think that after you purchase M60s, the remaining $600 will not be enough to buy some good separates. You are in the right track in thinking about Axioms and separates, as I really think that switching from a two channel receiver to a two channel power amp - preamp combo (all Rotel) was the best improvement I had in my system. See below what I have... Rotel combo msrp $1500, and Rotel CD player msrp $700, but you can get them with 10% discount or so...

Axiom M60s, QS4s, VP100 Onkyo TX-SR804 Oppo 970HD Rotel RB-1080/RCD-1072 REL Q150E sub, PS 3