NOTHING above the windows. It will take some time for you to adjust to the curtains there. Wondering what it would look like if you did not have the panels next to the fireplace....just the ones on the outside edge???

I would lower the rods, split the difference beween ceiling and moldings

sharon gives a good alternative .
Another ideas might be sheers which will blend in better

First choice would be to lower rods, splitting the difference between the ceiling and window moldings as Sharon has suggested. That would be the proper way to hang the drapery panels. I would definitely NOT put a shelf up there as I think that is a dated look. Second option if you can't lower the drapery b/c they will be too long, I would put a mirror on each side. Make it symmetrical looking...it is a great look!

I think in your case the rods are hung too high, they lose any connection to the windows. I like Sharon's idea about splitting the spacial difference.

HI -- I really think you don't need the drapes . You could just add mirror ,maybe a couple of framed mirrors that are the ones you would put on the back of a door -full length mirrors on the horizontal . The frames should be dark to go with the drape color . Why did you get such dark drapes ? It's the high contrast that is making that space so noticeable . Perhaps if the drapes had been a lighter color ,it would bug you less . Try a few décor items in that space but flat things ,not shelves ,just flat like matching modern canvases . You could also paint that wall the same white color as the windows and shutters .

If you want something above the windows, I would suggest maybie something iron.
http://deciture.com/shop/decor/7/lacole-metal-wall-art-set-2/

I would dump the curtains completely...it's taking you eye to ceiling so you don't see beauty of room and the windows. If you want something there...I suggest brown metal art.
Also, I find your fireplace is missing something at the top...the balance is off. Maybe heavy crown around top 'front' of f'place by ceiling...do not bring it around the sides, just corner to corner up front.

Just another thought.....you could get some stone, marble(?) like your kitchen countertop that I see peeking out of the corner and place it one your hearth, and let it overhang maybe an 1".

I agree with usergray, I think adding stone to give you a top on the hearth area would finish it off. And as others have said, your curtains are just hung too high right now. I know it's hard when you see advice that says "hang curtains as high/close to the ceiling as possible" but this is not a 100% flat rule. That's why professional designers and decorators exist, because of the situational circumstances and context of different spaces. ;-) You could just hem your curtains as needed for the shorter height. Good luck!

About the shelves above the curtains....in a word--NO.

The curtains are awfully dark for your room. Could you move them to another room?