Can you help me transition to 2 channel audio?

Acoustic treatment is a good place to start.
Spending money without might be a waste.
If you are handy with tools, you might want to build them your self, and save money. Your present system might be good enough.

If that doesn't do it for you, you might want to get a rega turntable - still LP is more audiophile.

http://www.squidoo.com/diy_acoustics/

http://www.geocities.com/jonrisch/a1.htm

“Is there any way to effectively have a HT set-up that also is musical?”

In my opinion, no. Not unless you enjoy music that has a lot of effects and gimmickry. I am assuming you don’t.

You do not mention if you have the option of a dedicated room for two-channel audio, which is what I would recommend. For 5k you’ll be able to set up a very fairly competent analogue system that will be very involving and very enjoyable.

Regards
Paul

I agree that another room for 2 channel audio would be best. You might consider, for example, a Primaluna Prologue 1 integrated amp and Coincident Triumph Signature speakers. That will give a sound that is diametrically opposed to the sound you're getting now from your HT system, and you'd probably love it. Those 2 pieces would cost $3K leaving another $2K for a source and cabling.

Cheers, and I hope you will soon be enjoying the music again.