What mid priced receiver sounds best?

This 80 watts/ch. (discrete amps!!) 7.1 Sherbourn would seem to be a great choice for you:

http://www.sherbourn.com/products/sr8100

$549 and a 5-year warranty - pretty hard to beat that combo!

-RW-

Any NAD except the T-series (junk). My very first system was NAD 7240PE/Paradigm Monitor 5se...GREAT sound.

I second the NAD rec. Very balanced, rock solid build. I call 'em the High end of Midfi. Second choice would be Marantz.