Hi FirebirdTN,
Rick ("Wid") has nailed part of the problem. When I looked at the photo, it was clear that the boundary effects from ceiling reflections would seriously degrade clarity and sound quality, although expecting any kind of dynamics from tiny drivers in a room this size is unrealistic.
Think of drivers as air pumps. The smaller the driver, the harder it has to work to fill a big space with louder levels. To do that, the driver has greater excursion--it moves back and forth over a longer distance, and as it does that, distortion rises. This includes speakers like the little Gallos, which I've liked in the past. But in a hotel-room demo, as soon as things got loud, you could hear the drivers starting to get a bit muddy.
Your Klipsch speakers sounded good with your computer because that's "near-field" listening. You are up close, at your computer, and the drivers don't have to do much to create ample loudness because you are only a few feet away from them.
There are no magic miniature speakers that will do what you want. You've experienced great sound with your M60s, which are placed properly. If you want similar quality, then consider the in-wall W22s or w2s and don't jam them up near the ceiling.
Regards,
