Build a TT based set up for $5K

You've asked a pretty hard question since we don't know enough about the space where you're planning to use the system. I actually just did this for my sister. She wanted a modest-but-good system that would be a minimum of bother (read: no tubes). The VPI Traveler/Ortofon 2M Black combo is a good idea. I was able to find her a VPI Scout with a different Ortofon for about $1,000. We also got a British brand: LFD integrated amplifier with a built-in phono stage for moving magnet cartridges, which was about $2,700. She added a dock for her iPod which plugged into another input on the LFD. Finally the speakers were a used set of Green Mountain Audio Europa's which were about $900. After adding in wire, and a CD player that I gave her, we ended up at about $4,800, pretty close to where you are looking.

And the system sounds fantastic! The Green Mountain speakers present a very natural sound, great with classical, orchestral music, and rock, although they do not have deep bass. The LFD is a real gem, and totally innocuous. You don't notice all the great things it does, until you compare it to lesser gear. It was obviously crafted by someone (Dr. Bewes) who cares about music.

Frankly you should probably track down local resources, either local audio dealers or a local audiophile group with members who will let you hear their systems. Your taste and ideal sonic profile might lead you to favor horn speakers, or planar speakers, or you might fall in love with little flea-powered single-ended amplifier systems. I think the most important things to note are a) it should be fun and b) getting stuff that works well together is critical to the best outcome. Buying based on reputation or putting together a random list of "recommended" components is a sure path to mediocrity.

Good luck with your search, and have fun!

With respect to the room for the system.... I will be setting it up in the living room. The floor plan is as follows: Living room flows into the kitchen.

The Living room is 16ft X 15ft and Kitchen is 21ft x 15ft.

The Living room has TV @ 12:00, Couch @ 6:00, cabinets and 2 chairs @ 9:00 and the 3:00 side is open to the kitchen. There is no real boundary between the 2 rooms except for a 2 foot wide archway.

The issue is whether I should place speakers facing lengthwise @ 9:00 on either side of the chairs or on either side of the TV @ 12:00.

I don't think I can place them 3 ft from the wall like in dedicated listening rooms. Does this mean I have to go for monitors?

I forgot to add the ceiling is 9.5 ft

My $5K system.
Yaqin MC-10CL integrated tube amp $600 new (+$300 for tube replacement)
Yaqin MS-12B phono pre amp $300 new (+$100 for tube replacement)
Arcam FMJ CD23 CD player $600 used
Tyler reference monitor with stands $1000 used
Clear Audio Bluemotion $1200 new
Audio Technica AT150mlx cartridge $350 new
Cables, interconnects $600

assuming you will be sitting on the couch to listen, you should put the speakers on either side of the tv, and out at least a foot from the wall, more if you can. I think PSB makes the best speakers for the price. I am using PSB Synchrony Ones now, but they have many other less costly models, including the most recent image towers that have gotten rave reviews.