You can put wall paper on both side with light on top and shelves. Here is some wallpaper to give you an idea. http://www.veronneau.com/design/?id=223

Here are a couple of fireplace ideas - Tile, or interesting artwork, the possibilities are really endless....

LOL-- Unconscious-- that artsy FP looks like someone was unconscious when they created it!

Are you putting built-ins in the left niche? Are you painting? What color?

I'd definitely remove the tile on the floor. You'll probably want the mantle. It all looks pretty plain now, but you could add more trim around the FP, and/or change the tile. Part of the issue is that the tone of the tile and the tone of the mantle are similar, against a starkly contrasting wall....

Hello,

Because the placement of the fireplace is awkwardly tucked in the corner, it gives you any opportunity to make a statement in the room.

Use the placement of the fireplace to your advantage, by making that corner into a cozy reading corner or sitting corner.
The big statement can come from covering that entire section of the wall with tile, stone, refurbished the choice would depend on what look you are going for in the room. Add a nice sized accent chair with a small round table.

Make it seem like the fireplace was specifically put there for that corner and that chair.

April, nice transformation....(except for the TV above the FP. Does your neck hurt?)

haha I know. We struggled with that one. It not as high as you think, but still it looks way up there.

I would do exactly what is in Aisha's suggestion. You have an unusually, placed fireplace that will difficult to incorporate into a traditional look. I love the idea of creating a sitting area in that space, especially for reading.

It's a big living room by the way. I will send a new pic. The kitchen is on the other side. The patio door is adjacent to the fireplace.

I just posted a fireplace I finished today on my page go check it out , I think that stone will look great there

But do you think we should remove the tile off the floor? It's a gas fireplace and the flooring will be hardwood

It is usually code to some type of non combustible material ( usually tile or a slab of stone) I would suggested what ever stone or tile you pick find a complimentary hearthstone
If you saw my photo I installed a beach comber slate and a Durango limestone hearthstone and shelf aswell

Id extend the mantel across the left side and build in your tv below and make shelving storage above. I've attached a pic of a recent fireplace renovation (we did the tv above as the firebox was lower) but you can get the idea of an elongated mantel.

We would take the mantle off and replace with one that extends to the wall (about 8" thick walnut would look great) and cover the entire wall floor to ceiling with rock or split quartzite and use granite tile that blends with your flooring at the base.

Thanks for all the advice ! So I think I know what will be nice. So I was thinking to remove all tile and mantle and paint a gray or dark color to mimic tile floor to ceiling about a foot or so thick on both sides of fireplace and around fireplace and place a nice painting above fireplace. Then next to it do the tv and shelving in the same paint color as the mimic tile paint. What do you think? Or instead of mimic tile paint job do actual tile/slate/granite?

Here is an example

April, I really love your advice the best and the work done for such a low cost