Suggestions on replacement AV processor...

The answer you will get from most audio/HT buffs is to have separate systems, provided you have the space and budget for both. Some of us like me, however, do not have room in our homes for both. My own priority in building a system was to have really good 2-channel audio, but also enjoy a high quality HT system. (You can look at my system in "Virtual Systems", where is listed under my member name Sdcampbell with the title "High resolution audio/HT system".) After a lot of looking, listening, and thinking about buying the best pre/pro I could afford, I bought the Bryston SP-1 (Bryston also makes Lexicon), which provides a high-quality analog bypass circuit, plus excellent surround processing. I continue to be impressed and pleased with the high quality audio that Bryston has delivered in the SP-1 -- not to mention their 20-year transferrable warranty. I can't say the SP-1 is the best choice for everyone, but if your priorities are on audio quality rather than lots of features, and you are limited to a combined rather than separate audio and HT setup, then the SP-1 ought to be on your short list.