Need Help on Dedicated Listening Room

First get F. Alton Everest, "Sound Studio Construction on a Budget" (covers all kinds of listening/recording rooms) or his "Master Handbook of Acoustics, 4th Edition". You'll then be able to analyze your room's main resonant modes and see what's needed to overcome its shortcomings. There are lots of commercial and DIY room treatment devices discussed too. This book is a real bible for audiophiles interested in more than just the components of a stereo system, and it's safe to say that nothing matters more than the room. If you're interested, I have emailable DIY designs for Argent Room Lens clones and RPG-style diffusors you can make yourself, assuming at least a minimal home workship.

If you don't upgrade your speakers, $2000 is fine for a nice integrated and cd if you buy used. You may even get into something like the classe integrated with cd. Then, just blow $150 on a rotel tuner. You won't even spend much on cables if you go with the all-in-one route.

Is your room a "closed-in" 11.5 X 13 X 10?
If it is, you will most certainly be challenged by unavoidable bass modal problems as your first obstacle to deal with. Set up will be critical for best speaker to speaker location, including seating possition(s). There will be trade-offs, also depending on your set-up(long wall vs. Short wall) set up, etc.)
MIGHT I STRONGLY SUGGEST a speaker sellection scenario(in addition to careful speaker and seating possitioning) where you can BIAMP, AND EQ your bass woofer separate from your midrange/hi-freq drivers!!!! IN a room that small, you'll have to overcome some bass anomolies which will keep you in that "small-room-boom" and or "peaky", bumpy, small room sonic signature(which you're trying to overcome ideally).
As it is right now, your Prelude P-FR's(which I used to own by the way) are definitely giving you that "one-note" boomy bass with little pitch definition, speed, and that unavoidable small room sonic signature unfortunately.
I say this and I'm not even in your room!...but I know what's going on there mostly.
In that small room however, if you can get a good Parametric EQ on your bass woofers, and leave your upper frequencies untouched. you can potentially get a tremendously balanced frequency response, while maintaining your sonic purity and integrity in the midrange on up!!!
For a lot of full range speaker situations in small rooms, this is often a tremendously good solution.
Keep in mind, speaker and seating locations as a foundation are still of utmost importance from a starting point. (as you can't overcome bass "nulls", for one.)
After you get your speaker set up for proper response, you can then concentrate on treating reverb, reflections, and other acoustic challenges in the room. Just be careful not to over-dampen your small room. As it's easy to get a DEAD SOUNDIng room easily in small room situations I find.
Yes, indeed, there are lots of books and articles to suggest sound treatments for rooms. But in the end, you'll have to experiment, and try for yourself to know what's doing what! (it will take time and experimentation on your own..otherwise it takes money and professional help!)
Another route you could consider would be smaller satalites and subwoofer combinations. There's more latitude with sub placement vs. satalite placement, since the two usually don't ideally work as good in the same exact location overall! This lets you place the woofer(s) in their best possitions, and the upper frequency units to be possitioned in theirs. Also, you can EASILY EQ a powered subwoofer for ultimate performance!

Books to go through: F. Alton Everest's "Master Handbook of Acoustics(2-3rd addition, as 4th addition has many mathematical errors!!!!); F.A. Everest's "Studio Construction on Budget"; Robert Harley's, "Complete Guide to HIgh End Audio";Back issues of Stereophile Guide To Home Theater's "Home Theater Architect" article(1999-now!)
Or search the net for more acoustics related.

Good luck!

Park your car outside convert your garage into your music room. Space to properly position speakers is extremely critical. The room is responsible for at least 50% of your overall sound quality. I can make 10 K of equipment in a 20x23 room sound better than 20 K of equipment in the room size your trying to use.

Now, now....
You CAN do it. Arrange a VERY tight nearfield triangle, with GREAT 2-way monitors that don't try to reinvent the bottom octave. Any of a bunch of 5 or 6" 2-ways would work.
My favorites are the Revel M20 ($$$) and the Spendor S3/1p
($$). Try to avoid too-low efficiency LS3/5 or Dynaudios, though. The trick is to have a seamless crossover and thus great coherence between the drivers. You won't accomplish this with ANY 3-way in your short listening distance, so don't try. At a lowest system price I'd VERY definitely try the latest KEF Uni-Q ONE for wide-spot nearfield use, as you won't have head-locking syndrome or such severe sit-stand spectral changes. Plus it's a beauty in cherry.
Finish the system with an NAD 541i ($400 street) CDP and a
good integrated (Audio refinement Complete $600 used), a couple of very nice Canare ICs (Markertek), solid Plateau V23 sand-filled steel stands ($200) and you'll be done at
at about $1700! Can't imagine a finer sub system. My upgrade path would start with Nordost Blue Heaven on the CDP and speakers for better transients and extension, and then the Spendors (NOT the S3/5...only the S3/1p or the SC3 turned sideways (like one and a half S3/5's).
Move EVERYTHING (the speakers, your listening seat, all the stuffed furniture, sidewall treatment, rugs) around a lot until you lock in some magical music-making. THEN knock down that wall as a last resort! Have fun.