GO with a projector!
Here is what I bought for my apartment and all for around 2k. With a 4-5k budget you can get an amazing projector and a full 7.1 surround sound.
Optoma GT750E (Gaming Projector) - $600 there are MUCH better projectors than this one but it will all depend on your room.
Optoma GT760 (Link) Newer modelElite Screens Manual Pull Down 150" 16:9 - $235 FIXED FRAME is the way to go or you can EASILY make your own FIXED FRAME screen.
Elite Screens(Link) there are better screens out there as wellYamaha RX-v673 $399
Yamaha Receivers (Link)Bic America (Acoustech Surround Speakers) - $899 for a full set the link below you can talk the price down. They ship from Vegas and these speakers are comparable to Klipsch. I read that EVERYWHERE from Klipsch owners and non Klipsch owners. There are different speakers that will sound better for home theater movies or just music. I chose the Acoustech as its better for movies and games.
Acoustic Sound Design (Link)If you go with a projector (which in my opinion is the way to go over a small TV anything below 90" is small) you need to figure out a few things. Trust me 110" - 200" in your own home and 3D for games or movies..... just mind blowing man.
If you want advice on everything your best bet is to go search for information at
http://www.avsforum.com/ you will get the best info ever there! I researched for a month or 2 before I bought anything and in the end I chose the above. Projector was first coupled with my cheap @#$% HTIB, then the screen so we could paint the apartment, then the reciever and then the speakers. I also ended up buying a good bluray3d player and I have everything running through my reciever to the projector.
You will also want an Active Redmere HDMI cable from monoprice they are super cheap but you will need it for running cable past 25ft if you want a good signal and 3d.