You might try a framed out piece- running horizontally but tall enough to cover, and wider than the television.

can you buy a big plain canvass from an art shop and paint it your wall colour (or a bright colour like orange maybe) and mount it over the hole ? then just stand the TV infront ?

Thanks for ideas..I was thinking about a full motion mount but due to the way it's cut out, I am not sure there is a stud to attach to. Will look into ideas:)

I just re--read that you are trying to avoid the drywall..it's not that expensive and relatively easy to do, maybe you should reconsider...otherwise this space will be the elephant in the room, always demanding attention...or to work around it...how frustrating.

Only have the one photo, but can see that the flatscreen is sitting on the fireplace mantel. You could take the fireplace surround details and enclose the remaining distance from the mantel to the ceiling with the painted wood. Just leave a cutout behind the tv to reach the outlets. This will visually integrate the fireplace.