Good Two Channel to OK Five Channel

Not sure what your definition of "reasonable" is, but for a processor I'd recommend a Lexicon DC-1. You should be able to find one for <$1K at this point. Make sure to get ver. 4.0 software and you'll get superb movie surround sound. Straight DD is good, but their Logic 7 mode is even better. It will give you the option of doing 7 channel surround later if you want, but even if you don't, it's a great, easy-to-use processor.

Not as sure what to recommend for reasonably priced 3-channel amps - obviously the three channel version of your two-channel amp would be ideal, but it's probably too expensive. You'll want a decent amp to drive the Contour center channel. Maybe Rotel makes a good 3-channel amp?

I like your choice in gear - I have Krell amps, Dynaudio Contour speakers and the Muse Model 9 Signature as well, so I agree completely that your music system is excellent!

Stay away from the Lexicon processors if you value high end, clear, musical, refined sound quality...my experiences anyway. The Classe SSP25 used should be all you need, or the Krell HTS that's on the used listing here pressently for $1800 will be PERFECT for you for refined, ultra clean(as it gets!!!!) for HT 5.1! Look no further than these two, really. (used Class SSP25 THX pre/pro, pure dirrect w/analog through puts for all inputs is around $1k used range).
As for amps, the inexpensive(relative) used ATI amps are a near MIRROR match for the Krell 250a amp. you should find a 3 channel(or bridge a 6 ch) ATI for your purposes, no problem. Otherwise, the used Krell 3 channels are your sonic match for your existing.
Good luck...and keep the sound quality in tact!

Guys, thank you for your thoughts. I've been reading alot of the threads and several other units have been repeatedly mentioned as good values: Acurus Act 3 ABM, and Proceed PAV. Any thoughts on these units?

Regarding the Classe SSP25 and SSP30, what's the difference, what's the most recent version?
Which version of Krell's HTS are you recommending? I've read that the original unit was "buggy."

The ATI amps seem to be a good choice, however the two units recommended by ATI the 504 and 506 when bridged to 3 channels have at least one channel that has a lot more watts than the others, including my original two channel. Is this a problem? If not, what channel should have the more powerful wattage?

Thanks again.