What a tricky space! I am also not a fan of a TV above a fireplace. I would mount the TV in the corner (to the left of the fireplace) on a retractable arm, so the TV can be set at an angle. I would then place the sectional in the middle of the room. Even though you have carpet, I would purchase a large area rug to anchor and help define the living room space. Then accessorize with a wall-mounted TV console table, large square ottoman or coffee table, indoor plants, framed photos/artwork, etc. I would also consider repainting, unless you dig the tan.

Thanks! I like the retractable TV mount/wall-mounted console idea - I have a TV stand/console but am not really partial to it (it's quite large and probably wouldn't fit in that corner anyway!).

I definitely plan to re-paint! The tan is very orange-y. I was thinking a grey-toned color. I'd also love to re-do the fireplace surround at some point (seriously, GREEN marble?!) but I'm not sure how pricey that is =X so for now we'll deal with it!

I have a large canvas print (grey and purple tones) that is currently on the wall behind my sofa in my apartment - I think it might be too wide for the stairs wall in the new place because of the angle, but might fit above the fireplace and could double as a "cover" for the hole meant to hold the TV (meaning I wouldn't have to patch it & it would be there for resale purposes - I know some people like having the TV above the fireplace).

Good point about moving the sectional. I think if you came down the stairs and turned right to go to the kitchen area, you would have a better traffic path than having to walk around a piece of furniture. That being said, if you are still in the market, I would continue to look for a better layout. It's very odd.

Yeah, the green marble is pretty dated. You could easily spray paint the gold accent on the fireplace as well --I know they have special paint for that now. Good call on the wall color too. That alone will make a huge difference!

Good luck on all your projects!