How many inches of space do you have above the cedar? Juno Gen 2 led 2" require less than 4-1/2"".(they recommend 5-1/2" to install properly) and allow insulation contact. Here. 1000 lumens.

And you can use under cabinet leds.

Consider some conduit to disappear at the juncture of wood and beams. Add under the cabinet lighting. Add over the cabinet lighting. Add Pendants . Call a certified electrician, and your contractor first. A lot is possible in a gut, and that's what I am assuming here.

How about a very simple modern track light? Installed on the beams?

Once that drop ceiling is removed and the beams exposed i would suggest you look into cable lighting.It is perfect for these situations

I LOVE your house! we have a similar situation, only with no upper cabinets (which is really annoying). below is our setup, which is working pretty well for us:

two sets of spot lights from above, which we angle towards workstations and cabinets.

above the cooktop, a Sylvania 10 watt LED under cabinet light. it's so bright it actually gives a good amount of ambient light all around, but the housing is designed so it doesn't shine into our eyes. (excuse the sloppy wire you see coming out of it. that's temporary. these can be hard wired too.)

there's also an LED wall mounted task light right behind the sink. it's only about 5 watts, anything brighter was too blinding.

also, for you, I'd suggest a few pendant lights above your breakfast bar. when we do our big kitchen reno, I plan on replacing the spotlights above our bar with something like this:

check out this company. we have it and its awesome. can do any configuration..

Tech lighting

There are low profile recessed lights

Or you could just hang some cool fixtures or single spot track lights....

Good luck!!

Wow! Thank you for all of these very helpful ideas. There are a number of really low profile lights that we had not yet come across and will be sharing with our electrician and contractor. There is apparently really limited space above the vaulted ceiling to install anything. We would prefer the low profile pot lights, but may end up with the track lighting along the beam or the lights on the wires. I really appreciate all of your insights!

I could not figure out how to comment on all of your ideas, but I really appreciate the time that you took to give us these ideas. We will send photos of the 'after' renovation - completion sometime in April 2019. Thank you!

looks great! did you tear down the stone fireplace? I'm a little sad, but it really does open the room up a lot. nice!

Looks great so far!!!