The Emotiva UMC-200 would be an excellent preprocessor choice for you. It lists for $699 but if you join their E-Club for $50 they'll knock 25% off the price.
They also have a terrific 7.1 channel receiver for only $499, the Flex 8100. It has 65 watts/channel ALL channels driven simultaneously. It also comes with a sophisticated room correction system which will tailor your speakers' sound to the room, a very nice feature indeed. In addition, it has an 11-band parametric equalizer which will allow you to finely tune the sound, you are not limited to just Bass and Treble controls.
It comes with a 3 year warranty and a 30 day in-home trial so that you can listen to it in your room to make sure it's right for you.
Receiver:
https://emotiva.com/products/receivers/fusion-8100
This is the way I'd go if I were you. Mate this receiver with some good quality speakers - Tekton, GoldenEar, or the much lauded Andrew Jones designed Pioneer speakers. You could put together a *killer* 5.1 system for less than $1200 if you shop wisely.
Subwoofer($105 incl. shipping, used - like new):
http://www.amazon.com/Pioneer-SW-8MK2-Designed-100-Watt-Subwoofer/dp/B008NCD2PC
Front L/R speakers($105 ea. incl. shipping, used - like new):
http://www.amazon.com/Pioneer-SW-8MK2-Designed-100-Watt-Subwoofer/dp/B008NCD2PC
Center channel speaker ($97 with free shipping!):
http://www.amazon.com/Pioneer-SW-8MK2-Designed-100-Watt-Subwoofer/dp/B008NCD2PC
Rear speakers ($87/pr. used!!!):
http://www.amazon.com/Pioneer-SW-8MK2-Designed-100-Watt-Subwoofer/dp/B008NCD2PC
So, that's about $510 for the speakers/subwoofer and $500 for the receiver - all delivered to your door!! This will give you a VERY good sounding 5.1 multi-channel system for right around a grand. Find a nice Oppo BDP-103 universal player for $400 and you would have one hell of a good system for less than $1500.
Oppo BDP-103 ($400):
http://app.audiogon.com/listings/cd-sacd-players-oppo-digital-bdp-103-blu-ray-sacd-cd-network-streaming-device-versatile-excellent-cond-2015-01-05-digital-95014-monte-vista-ca
It don't get much better than that, pardner!!
-RW-