Scott,
I'd go with your second thought...put the money into an amp, and use your denon as a pre amp. If you are that skewed towards 2-channel, I'd spend all your budget on a 2 channel amp, and let the denon push the rest of the speakers for HT (the mains take up a lot of juice, so a dedicated 2 channel amp will relieve some of the stress on the denon). For $1200, you can buy a nice used amp, McCormick DNA, Anthem Amp2, and I'm sure a whole host of others. this will also keep your upgrade path completely open for when you decide exactly where you want to go.
I'd go with your second thought...put the money into an amp, and use your denon as a pre amp. If you are that skewed towards 2-channel, I'd spend all your budget on a 2 channel amp, and let the denon push the rest of the speakers for HT (the mains take up a lot of juice, so a dedicated 2 channel amp will relieve some of the stress on the denon). For $1200, you can buy a nice used amp, McCormick DNA, Anthem Amp2, and I'm sure a whole host of others. this will also keep your upgrade path completely open for when you decide exactly where you want to go.