Can you help me transition to 2 channel audio?

Yes, you can have convincing HT and satisfying music sound. Just go 2 channel. Start with a pair of Zu Definition speakers. You'll get convincing spatial coverage and rock-solid anchoring of dialog to the actors on screen. You'll also get all the dynamic energy essential to film emotion along with seriously superior fidelity. Get a preamp with HT pass-through just in case you backslide into X.1ch. More to the point, if you find you really MUST add rear and/or side channels, Zu has some slender options. But you won't need them. The right two channels aren't just enough, they're better!

Phil

I'd go with Primaluna tubed integrated, decent speaker on stands and a Lenco rebuilt turntable. All in a different room. You might have enough cash for decent cables, etc.
Keep us posted.

>Is there any way to effectively have a HT set-up that also is musical?
Yes, with a combi system. First put together a musical 2 channel system like you are already planning. Then use the front L/R pre out of your HT system and connect it to a line level in on the preamp of your new 2 channel system. With a setup like this when you use your 2 channel system your HT system is not in the loop but when using the HT system it will be improved from your new more musicial front L/R 2 channel setup, see link below;
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My surround sucks and I want to get some good two-channel music
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I agree that another room for 2 channel audio would be best. You might consider, for example, a Primaluna Prologue 1 integrated amp and Coincident Triumph Signature speakers. That will give a sound that is diametrically opposed to the sound you're getting now from your HT system, and you'd probably love it. Those 2 pieces would cost $3K leaving another $2K for a source and cabling.

Cheers, and I hope you will soon be enjoying the music again.

“Is there any way to effectively have a HT set-up that also is musical?”

In my opinion, no. Not unless you enjoy music that has a lot of effects and gimmickry. I am assuming you don’t.

You do not mention if you have the option of a dedicated room for two-channel audio, which is what I would recommend. For 5k you’ll be able to set up a very fairly competent analogue system that will be very involving and very enjoyable.

Regards
Paul

Acoustic treatment is a good place to start.
Spending money without might be a waste.
If you are handy with tools, you might want to build them your self, and save money. Your present system might be good enough.

If that doesn't do it for you, you might want to get a rega turntable - still LP is more audiophile.

http://www.squidoo.com/diy_acoustics/

http://www.geocities.com/jonrisch/a1.htm