What is the best audiophile speaker for a tiny square room?

I would try and compare the ls50's to the audience 1+1, i have the audience in my bedroom, they are easier to locate near room boundaries than the kef's and the midrange is as good as any speaker. Like the kef's a good sub, like rel t3/5/7 should be considered for bass depth

I would recommend Harbeth speakers. Depending on your budget, they create an incredible sound for the space consumed. 

@zaphod2006 I had the Audience 1+1 and the KEF LS50 driven by a Peachtree Nova 150 in the the same room for a few months. The 1+1 was 2x the cost and I wanted to like it more than the LS50 however, I could not get it to sound good. The imaging was bad the soundstage was not correct. I just could not get it to sound correct in the small room. I even called Audience to ask advice.

It think the 1+1 needed more space from the front wall and I did not have the space to do so. The KEF LS50 was perfect in my acoustically treated room. I think the Coincident design makes placement easier.

My new Thiel CS3.7 also has a coincident driver design (Thiel COAX driver) which I think helps in placement.

Atma-sphere amps have been mentioned, and imo they work very well with SoundLabs (disclaimer:  I'm a dealer for both).  

One of the nice things about the Atma-Sphere amps is that you can pull out some of the power tubes and run them at reduced power and therefore reduced heat.  Not that a pure Class A tube amp is going to be cool-running!  But with a pair of MA-1's, for example, you can essentially optimize the number of tubes used for your needs.  

When I lived in New Orleans it was in an old house that used window-unit air conditioners.  I had some very quiet ceiling fans professionally installed.  At a low setting the ceiling fans more than doubled the listening time before it became necessary to take an AC break and turn on the window unit to cool down the room.  

The ideal would have been to place the amplifiers in an adjoining room.  Because of the already low output impedance of the Atma-Sphere amps, the series resistance of a fairly long run of speaker cable is not an issue.  Likewise the balanced connection between an Atma-Sphere pre-amp and amp is long-run-friendly, so the preamp can be in your listening room while the power amps are in another room.  This may not be practical in your situation, but I mention it just in case.  

Duke

I appreciate everyone's input. Although my Soundlab panels sound great, one thing that bothers me in this small space is that they are like monuments standing in front of me blocking my imaginary sound stage. So it seems as if the instruments located on the sides of the stage feel like they are coming from behind the big 5 ft black "curtain" of the speakers. If I had 10 feet of empty space between the speakers, I could "visualize" the whole stage. Or if the speakers were shorter, I could visualize over them.