IMHO, I would use a 5 channel amp for all of the front speakers or a 2 channel amp for 2 of the rear speakers keeping all the fronts on the Yamaha.
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Sorry, to be more specific,
1) 5 channel amp - L, C, R, and front ceiling pair, then the surround, surround back, and rear ceiling pair on the Yamaha
2) 2 channel amp - rear ceiling pair, then the rest on the Yamaha
and actually I think option 2 would sound the best due to the fact that only a single pair of speakers are being driven from a different amp and likely the least significant pair as well.
I just realized that I forgot to mention it will also be used for stereo playback not just theater. Does that change the way you would set it up, meaning amp selection vs. speaker configuration. I "think" I would be ok with powering the L & R with a solid dedicated amp to get the best sound for stereo. Or possibly using a 5 channel amp for the traditional 5.1 speaker set up.
Sorry for the late reply on this, but I would think especially if you are using this also for 2 channel playback that a separate 3 or 5 channel amp for the front channels is the best option. As long as you're talking about adding a quality amp, which it sounds like you are with the brands and budget mentioned especially if you're open to a good used amp. An Emotiva XPA Gen 3 in 3 channel config would be just over your budget ($1100) and would easily outperform any receiver. The front channels have easily the highest demands placed on them and your Yamaha receiver would benefit more from offloading the power used by those.
Thanks for the reply I picked up a Krell 5 channel amp that plan on using for the fronts. I was thinking out loud that maybe I should use the Krell for the main 5.1 set up, and use the Yamaha for the 4 atmos speakers and the right and left surround. My thought is that most of the theater playback is in 5.1 so those 5 speakers would benefit the most with the Krell. Thoughts?