What's best bookshelf speaker for an 8x10 room?

I can testify that the Merlin TSM will do well near the front wall. In a second system, I have a pair placed 10 inches into a huge room (16x25), resting on their sides in a large, open-sided wall unit, driven by a Manley Stingray II with a Marantz SA-11s2 SACD source and a small, sealed Von Schweikert sub. In your room the sub would likely be unnecessary. Naturally, they'd image better on stands four feet into the room but they do quite well in this compromised arrangement.

Paraneer gives good advice about avoiding rear ports so near the front wall. The TSM has a sealed cabinet, as you probably know. I have a pair of front-ported Omega Grande 8R's, which also work well there, but the Merlins are quite a bit better.

For a room that small, ProAc 1sc's should work very well.

Sennheiser HD800s.

I've heard System Audio Mantra 10 speakers are very special and very musical. You can give Oz a call at Let There Be Sound and he can tell you more about them. I can give you his info if interested (or you can google the store and tell him David referred you). He has been very helpful to me with all my musical gear. The Mantra 10 retail for $1500. Check out the System Audio website. The Aura series is still good but the Mantra are even better. It is a great value from what I've heard.

Nice pair of ATC SCM 19s for sale here now. If rock/hard rock is your genre these will knock you off your chair. In a good way. Read the reviews, but ATCs excel in dynamics, punch, timing, and outright midrange clarity and force. Everything you need if hard rock is your cuppa. A little over your budget, but given what you're looking for they're more than worth the stretch IMHO. Best of luck.