ndtiger,
Your budget seems quite enough for the audio part of the setup unless you need to worry about furniture-grade finishes and boutique brands (not that there is anything wrong with either). I am quite happy with Marantz SR7400 reciever. It has Dolby PLIIx allowing 7.1 from 2 or 5 channel material and sounds nice indeed. It also has video upconversion so you only need to run one set of video cables to the TV/projector (but not HDMI). You should be able to get it around US $600-700. Other options I would consider are Denons (3805 and up) if you want to move a bit up or Pioneer VSX-1014 if you want to save some $$$ and don't plan to use 4 Ohm speakers (e.g. Axiom M80's).
Your room is big enough for M80's or M60's and QS8 surrounds. I use QS8's both in the backs and on the sides in 7.1 setup but other folks reported excellent results with direct radiating speakers in the back (M2's or M22's).
For the sub going with SVS cylinders may be a bit too much after Bose. I would also consider Axiom's EP350 and up or HSU (I have STF-2 in a smaller room (15 x 23) and it is certainly sufficient). It is downfiring that was desirable as a child-proofing feature.
Plan the wiring for the future. Consider sending HDMI and component video into the ceiling if you ever want to add a front projector. Cost of this compared to the building costs should not be a concern and it may be hard to change later. Put enough of speaker wires to cover any future extensions (even if you don't want to set up 7.1 from the start).
Positioning TV. I am not sure if raising it a few inches will do the trick. If you have a dedicated room consider raising the back of the room where the second row will be. When builders are still there this may be not a big deal to set up and will add that theater "feeling" to the whole place. I used 3 table tops bolted together on kitchen cabinet legs for the raised platform for the back row seating and it works well enough and was very economical.
My Setup 
