I had a similar situation and my suggestion is to go with monitors and based on my experience you must treat your room accoustically i.e. first reflection points, corners, consider this for your budget purposes.
Short wall in small room
I would like to hear from listeners who have experience (good or bad) attempting to get good sound from speakers on short walls in small rooms. My room is approximately 11' by 8' withh an 8' ceiling, and the speakers I choose will have to back to the 8' wall, which they will share with a 20" Sony Wega TV sitting on a a Vantage Point video rack that is 45" wide, 23" high, and 18" deep. I am not trying to put together a home theater system, and although I might experiment with TV audio through the external speakers, I see the TV and HIFI as independent. Given the physical constraints that I have described, what speakers should I be considering in the used market with a budget of $1,000 to $2,000? By the way, I listen mostly to bluegrass, blues, jazz, and chamber music.