I'd mount the TV over the fireplace, that would break up that empty space. The fire place is the focal point in the room and all the funiture should be arranged to face it anyway so why not have the TV there also?
I would cut out the sheetrock over the fire place and do some min. reframing so a 3/4" plywood box (that you would have to build) could be made to set between the studs for your items like DVD, sound system ect. add 2 X 6 bracing between the studs for the mount above it, run all your wiring and cables behind the wall then resheetrock.
I'll send you pictures of two of these we have done when I get home on my own computer.
Total cost was less then $100.00 for materials.
I'd also change out that narrow base board with 5 1/4" base. What you have makes it look like the base was left in place and the floor was built up making it look to narrow.