Something tells me, Phasecorrect isn't a "local shop" kinda guy. Just an assumption. I could very well be wrong.
I'd consider probably, yes, spending much more on the video system for your dad, and probabaly get a good(maybe used...although other options for new) DLP Mustang II projector(Marantz,sharp,Sim Seleco), or more expensive used LCos(like from PAW, or whoever makes the Rock stuff). Either way, you might do some research, maybe go to avsforum.com, and as what's the "latest/greatest" for your budget(which appears pretty ample.
That said, for the audio system, I'd probably just recommend outlaw separates driving either something like M&K K7 system, with a good MX200 sub(could substitute Paradigm Servo 15 or earthquake sub), or something similar. Really, for the money, something like this is going to be fairly unbeatable as an effective(most any setup/environment, as the room is always a challenge) HT system that's "resolved" sounding as well.
There's a gillion combo's, but I doubt you'll trounce on the above system for the money. You could go the "your favorite minimonitor route", and add sub and such. But typical music speakers can easily be setup for less than stellar results, lack reinforcment in the midrange/bass/dynamics department(usually one midrange/woof), and sound too open, coloring sound, mixing with walls/ceiling/etc. I like The K7's cause they integrate well, are dynamic, do superbly placed closer to walls, take lots of power with ease, and are prettty sounding indeed. Also, cheep Klipsch SB1's/2's do pretty darn good as well, but probably like softer electronics.
Anyway, I like recommending the above over the likes of others by B&W, Kef, Nht, triangle and other popular choices others might make, especially for your Dads needs. You also probably should shy from full range systems in that room, as smaller will be easier to integrate, more flexible, and you gotta cross em over as small anyway.
What I mentioned is tried and true for your application. I'm sure he'd be tickled...and so would you really