Looking for suggestions on HT Setup

Stick with a 5.1 in this room. Try to get an amp with preamp output for the front two channels so you have the option of a separate 2 channel amp in the future and keep options open for a 2 channel system for audio only. Shop last year models. I got an rx820 for about 75% to 60% of new price. Spend less on back channels and more on the center channel - that is where most all the voice is sent. You need a sub. I agree with you about a 77" non-projection tv. May be too big for that room though.

For speakers, I would keep an open mind about other brands. I don’t have much experience in that price range. Put the rear channels in wall or ceiling. There may be other brands that offer better sound than something form a big box store. And, maybe look at used too. I would look at bookshelf speakers for that room front L&R plus the sub and a great front channel. Good luck. Fun stuff.

Finally, I much prefer the wall behind the TV to be dark and consider some sound  dampening material in that room or it is going to be reflection city.  

I've always wanted a theatre room and that's finally happening. We're finishing the basement after saving forever and I'm making this happen. The room should be 10'x13', I know it's not huge but it should be just right for what I'm looking to achieve. My question is if you were in this situation what kind of setup would you go with?

So far I'm thinking the Klipsch Reference Dolby Atmos 5.0.2 Home Theater System from Costco, adding two additional R-41M Bookshelf Speakers, Klipsch RP-500SA Dolby Atmos Surround Sound Speakers and a Klipsch R-12S for speakers. If my math is right, that should be 7.1.4. For Receiver I was looking at the Yamaha RX-A2A. As for TV/projector I'm looking at the 77" LG C2, I prefer the darker, rich colors versus a gigantic screen. I'm not opposed to a projector, I just don't have any experience with it, hence why I'm coming to you guys because I've seen what others have done in this sub and I'm impressed. My Max budget is ~$3,000 for speakers/receiver .

I've seen some hate on Klipsch in this subreddit so I'm curious as to what others would do with this kind of setup.

I hope people see this and have some good suggestions.

https://nox.tips/

https://xender.vip/

I got this,..

I have an older LG OLED - love the picture, but had a screen issue (not burn in) 4.9 years in and was thankful I got a 5 year extended warranty - OLEDs are very susceptible to burn in - be careful.

The C2-77 is on sale at LG.com for $2500 - great price!

I have the Yamaha RX-3080 - it's pretty good for the price but a little underpowered for my large room - but the A2A should be OK in a small room.

Staying with 5.1 to start is good advice.

I would not buy low end Klipsch or any big-box surround speaker package.

Get a "proper" sub: SVS/REL etc and don't skimp on the center channel speaker!